Virginia’s tax code is an opaque two-century accumulation of nonsensical hodgepodge. With Virginia’s one-term governorship and offset budget cycle, much has been made about this year being Governor Bob McDonnell’s main chance to leave his stamp on the Commonwealth. If he really wants to leave his mark, he should throw his full weight and energy behind a comprehensive revamp of Virginia’s tax code.
Whether you call yourself a conservative, a liberal, or something in between, there’s plenty in Virginia’s tax code to make you scratch your head. The machinery and tools tax forces businesses to pay taxes on equipment even if it hasn’t yet generated revenue. The business professional occupational licenses tax requires businesses to pay taxes based on gross receipts rather than net revenue, so struggling, unprofitable businesses must pay taxes despite making no money. In the state that lauds the Dillon Rule as the bulwark against a patchwork of varying rules, a patchwork of varying tax rules apply to local governments because of a 19th century notion that counties are rural, cities are urban, and never the twain shall meet. A cashier pays the same tax rate on income over $20,000 per year as a hedge fund manager pays on income over $20 million per year, whose children get his fortune when he dies, with nothing going to the state for kids born into less opportunity. Groceries, cars, and real estate are taxed, but services are not. The gas tax is a fixed number of pennies instead of a percent of price, and we have some of the lowest taxes on cigarettes in America.
Virginia’s many veteran-friendly policies and services are no surprise. From the very founding of our nation, the men and women who call Virginia home — and the families that support and sustain them — have borne more than their share of sacrifice in military service. Today, while fewer than seven percent of all Americans have served, nearly one in 10 Virginians is a veteran, and Virginia is home to six of the 10 places in America with the highest concentrations of veterans. Unfortunately, as the wars in Iraq and Afghanistan draw down, even in Virginia, far too many veterans return from fighting overseas and struggle to find work that will support their families.
There is a global scientific consensus that climate change is real and it’s the result of human activity that began during the Industrial Revolution and continues today. Unfortunately, the discussion about how to respond to this reality is too often framed as a fight between protecting the environment and creating jobs, as if the two are somehow mutually exclusive. Virginia cannot afford to sit on the sidelines or be distracted by sideshows. In 2009, I wrote legislation to offer tax incentives for companies that create new jobs in the renewable energy field. In 2010, a version of that legislation passed the General Assembly as the Green Jobs Tax Credit. That was a practical step in the right direction, but with even bolder action, we can create thousands of new jobs in Virginia by rising to the climate change challenge to our environment and our future.
Protecting and strengthen Virginia’s education system has been a top priority throughout my service in the General Assembly. As the parent of a child in public school, I have seen the great work of our teachers and the challenges they face firsthand, and I offer three ways the General Assembly could improve education in Virginia.