Significant federal cuts and expensive regulatory requirements have made this objective more challenging. Virginia needs new sources of revenue for these increased budget requirements, prioritizing measures which make our tax system more progressive, i.e., imposing higher tax rates on individuals with high income and wealth, thus taking into account their ability to pay and maintaining the overall focus of the Governor on affordability. Increasing the income tax rate provides an effective and fair way to address this need.

Currently, all individual income in excess of $17,000 is taxed by the state at the marginal rate of only 5.75 percent! There are three distinct bills proposing a new “Fair Share Tax” bracket: HB979 (Watts), HB1074 (Hernandez), and HB188 (Convirs-Fowler). All three would create a new 7.75-10% tax bracket for incomes over $1 million a year, and HB979 would also create an 8% tax bracket for incomes between $600,000 and $1 million. The bills also propose adjustments to deductions and credits and various allocations of use of additional revenue (e.g., public schools, childcare, and healthcare). HB979 also exempts food and hygiene products from local sales taxes. Differences between the bills will need to be reconciled.

Tell Our State Delegates on House Finance Committee to Support and Reconcile Fair Share Tax Bills HB979 (Watts), HB1074 (Hernandez), and HB188 (Convirs-Fowler)

All three bills are scheduled for a Subcommittee hearing on Monday, February 9.