For Your Consideration
Mike Lowry
Taxpayers may be looking back with nostalgia to the Governor Youngkin years as they pay their state income tax and other taxes if the Democrats in the legislature and the new governor have their way.
Gov. Abigail Spanberger, who ran as a moderate, has proven to be a “Taxosaurus Rex” and has from day one supported giant vast tax increases affecting all taxpayers from low to high incomes plus taxes on services and purchases.
The Virginia economy could be dramatically hurt by the vast proposed tax increases as neighboring states are going the other direction.
For example, West Virginia legislators are in the process of phasing out their state income tax. North Carolina’s flat income tax rate of 4.25% dropped to 3.99% this year and will continue to fall until it hits 2.49%. In South Carolina, two candidates for governor both have proposed full income tax phase out. Neighboring Tennessee has no income tax at all.
Take a look at just some of the proposed tax increases support by the Democrats: HR378 proposes a 3.8% net investment on individuals, trusts and estates beginning in taxable year 2027, which if passed would raise the tax rate on portfolio and passive income to 9.55%, one of the highest rates in the country.
HB378 puts a 3.8% Net Investment Income Tax on capital gains, dividends, and rental income to higher income individuals.
The tax increases not only apply to the rich individuals but also large corporations having a larger work force ranging from manufacturing plants to large retailers like Target, Walmart, and large grocery chains.
If passed, how will this impact future industrial and other employment efforts as well as retention of existing industry and businesses? If what has happened in states with high tax rates is an example, it won’t be good!
But the Democrats are not just after the rich and corporations with their tax proposals; some are especially targeting certain groups, HB 919 imposes a firearm and ammunition tax equal to 11% of the gross receipts from any firearms or ammunition by any ammunition seller or firearms manufacturer. If passed, guess where Virginians will be buying guns and ammunition? (Hint, it won’t be in Virginia!)
HB 900 and HB978 include sales tax to include digital services like Netflix, Amazon Prime, Hula, etc., as well as personal care services ranging from haircuts, home repairs, gym memberships, storage unit rentals, admission to plays and concerts, dry cleaning, landscaping, home improvement and even dog walkers.
The bills increasing taxes even include taxes on electric yard equipment like electric hedge trimmers and electric leaf blowers. At the same time another bill bans the sale and ownership of gas-powered leaf blowers!
Governor Spanberger has already announced she will reinstate Virginia as a member of the Regional Greenhouse Gas Initiative (RGGI), a cap and trade regulatory organization that requires a backdoor carbon tax. This membership comes with the demand for higher utility bills which had caused Governor Youngkin to withdraw from the program. Apparently, she does not think Virginians pay enough in utility costs.
If a majority of these taxes are passed, Virginia will become in league with heavy tax states like California, Illinois and New York that are experiencing both industry and individuals moving out to other states.
While Governor Youngkin worked to make the state attractive to companies to expand and relocate in Virginia, Spanberger and the Democrats seem to have the opposite goal.
States with high taxes have seen an exodus of people, particularly people retiring and with higher incomes. Many that have moved to Lexington, Buena Vista, and Rockbridge County have come from these states and note a part of their decision to move here was the lower cost of living compared to the states they left. If a lot of the proposed tax increases are passed, we can expect to see a large exodus of these and Virginia residents moving to the economically attractive states with low taxes and expanding industrial and commercial investment.
In her defense, Governor Spanberger seems to be encouraging a different kind of population growth with her order for state and local law enforcement to do nothing to help Border Patrol or ICE officials from removing illegal migrants in violation of federal immigration laws, including those with criminal records beyond just being in the country illegally.
An illegal migrant, Marvin Morales-Ortez, a 23-year-old from El Salvador who had numerous previous arrests, was released and had all charges against him dropped by the Democrat Fairfax County prosecutor despite an ICE request to detain him last month. One day later, the released criminal illegal migrant was charged with the murder of a man in Virginia.
Governor Spanberger seems to be sending a message to illegal migrant criminals, “Y-all come!”
Beyond proposed tax increases, new laws to change some felonies to misdemeanors, failure to enforce federal immigration laws, and expand early release of convicted criminals, this new Democrat-controlled legislature has proposed bills to create the most liberal abortion law in the country, greatly restricting home schooling, and even defunding VMI.
Clearly with some of the most extreme proposed political and legislative bills and policies, Virginians more than ever need to keep an eye on the newly elected Democratcontrolled legislature and governor.
