Virginia bill seeks fundamental tax reform
"I'm going to take a copy of my tax reform study bill with me, stick it in his hand and ask him to get on board," Del. Jim LeMunyon (R-Chantilly) told AMI Newswire.
LeMunyon's bill, HB 214, would create a 13-member committee comprised of legislators and private citizens who would recommend changes to state and local taxes to create what LeMunyon hopes will be a fairer, flatter, more transparent tax system.
To help illustrate the scope of the need for reform, LeMunyon proposed a series of other tax-related bills. One would phase out state and local levies on food. Another would prevent localities from raising machinery and tool taxes, merchant capital taxes and the business licensing (BPOL) tax. A third would index Virginia's personal income tax rates to inflation. The current tax brackets were last adjusted in 1990.
"The finance department will attach dollar figures to each of these bills within a week or so," LeMunyon said, "and then people will pick at them, and interest groups will get mobilized."
"But these are just the start," LeMunyon added. "The real need for tax reform is deep in the weeds of business taxes. But it's hard to get people excited about those. So I picked some of the bigger taxes that affect more people to help show just how big the need for reform is."
LeMunyon told AMINewswire he's yet to find anyone in the House who is opposed to a comprehensive study of reform.
"They all understand we're in an increasingly competitive tax environment, and we can't afford to ignore the issue," he said.
"Think about the bill I introduced to index the tax rates," he said, referring to House Bill 215.
"Every year, the commonwealth of Virginia gets tens of millions of dollars in extra revenue because the top individual rate kicks in at $17,000," LeMunyon said, adding that even someone making "$10 or $11 an hour" is in the top state bracket. "We — Republicans — are taxing the poor, and that's unconscionable."
The Federal Poverty Level for a family of four in 2015 was $24,250. According to the Virginia Department of Taxation, joint filers whose adjusted, gross income exceeds $23,900 must file an income tax return.
"We just can't do that anymore," LeMunyon said. "So it's time to talk about real tax reform. State taxes, local taxes, the whole thing."
If LeMunyon's bill is approved, the study committee would make its recommendations to the general assembly at the beginning of the 2017 session.