Laura Granruth | Tax reform
Virginia needs tax reform. And regular Virginia citizens—workers who pay income, property, sales and other taxes and fees—sense that the system isn’t working for them. They see critical public services being cut or eliminated. And the cuts have become so broad that they now include everything from public education to the closing of interstate rest areas. Reacting to what ought to be a source of shame, Virginia’s political leaders should see this as a chance to lead and they should not solely blame the national economy.
Do some Virginians pay too much in taxes? Indeed, many do because the tax code is stacked against them. Virginia’s highest income tax bracket is 5.75 percent and it begins at $17,000. This is essentially a flat tax that produces too little revenue, forcing Virginians to pay higher sales taxes and property taxes—two taxes that hit especially hard those least able to afford it. To add insult to injury, these taxes are usually the first raised in recessions. Thus, we wind up with a tax structure that hurts working families and fails to raise adequate revenue.
But a fairer and more stable system is possible. It can be attained by adopting a more progressive tax code that taxes according to ability to pay. Adam Smith wrote in 1776 that “The subjects of every state ought to contribute towards the support of government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.” Virginia should have little problem adopting a tax reform idea that is as well-founded and as old as the Union itself.
Progressive tax reform will raise taxes modestly on the highest income earners; however it will keep them lower for everyone over time. It will provide a more adequate stream of revenue just as it will allow for the lowest possible tax rates on the greatest number of taxpayers. A progressive state tax code is good social and economic policy and a critical part of any prosperous society. Virginia must consider it now.
Laura Granruth resides in Centreville.
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