TAX NEWS - June 2010

Virginia Tax: Virginia isn't poor; tax rate not set fairly

On Saturday, June 5, the Bristol Herald Courier reported that Gov. Bob McDonnell wants "big bold ideas" to address Virginia's budget crisis. He is talking about more cuts and continued shrinking of Virginia's schools and services to citizens. I have a bold suggestion: We need to raise revenue.

We expect legitimate governments, such as ours in Virginia, to provide good schools and universities, good roads, police and fire protection, parks, social services and elder care that keep horror stories out of our headlines, and a safety net for working people. Each of these expected services of government benefits some of us personally at different times. All of them together benefit everyone all of the time because they enrich our community and make it a better place to build our homes and careers, educate and nurture our children, and care for our families. Our legislators must find a fair and practical way to adequately provide for these needs of the Commonwealth.

In Virginia, we need to take a close look at our income tax structure. Based on 2007 figures in a report published by Institute on Taxation & Economic Policy this past November, we have an inverted system in which a person making $11,000 pays 8.8 percent in income tax while a person making $77,000 pays about 7.9 percent and someone making over $1 million a year pays about 5.2 percent. There are several good ways of correcting the imbalance, and I hope that the governor's commission is looking at this problem. It is not practical for less affluent people to pay higher taxes than the wealthy. It yields less revenue for the state, damages consumer potential, and discourages industry and hard work all along the spectrum.

Paying one's fair share of taxes is the foundational level of community service, and citizens of the Commonwealth are up to the task of doing what we need to do. We are not a poor state, and we will not have to live like one if our legislators will stand up for fairness in the tax structure.