Leaders in the Virginia House of Delegates on Friday announced legislation to protect middle class taxpayers from Governor Northam’s middle class tax hike, while also providing broad tax relief to all Virginians.
“Today is an important day as we introduce a plan that does exactly what we have all promised our constituents we would do while serving them in Richmond,” said Speaker Kirk Cox (R-Colonial Heights). “We are offering a responsible plan to stop Governor Ralph Northam’s middle-class tax hike and provide targeted tax relief to middle and low income Virginians while protecting the state’s AAA bond rating.”
The proposal unveiled Friday allows taxpayers to itemize their state taxes regardless of how they file their federal return. This will allow middle-class families to receive the maximum amount of tax relief at the federal and state level. This will protect over 600,000 middle-class tax filers from a hidden tax increase.
The proposal will also increases the state standard deduction from $3,000 to $4,000 for an individual and from $6,000 to $8,000 for a married couple. This will provide broad tax relief for 2.7 million Virginians who claim the standard deduction. This plan will fully implement the federal tax cuts at the state level, protecting a middle class family that itemizes from what could be an $805 tax increase or providing an additional $115 in tax relief to a family that chooses the standard deduction.
“Our proposal keeps more money in the pockets of Virginians without costing the state one penny,” said Caucus Chairman Tim Hugo (R-Fairfax) who will patron legislation to be filed next week. “Even after providing this tax relief, the state will have more money for teachers, transportation and other key services than it did last year. Our plan says “no” to a tax hike on the middle class and “yes” to cutting taxes for all Virginians.”
Because there is not enough time to make the changes for the 2018 tax year, this plan will allow taxpayers to claim an additional deduction in 2019 to offset higher taxes paid in 2018. Recognizing the federal tax law is temporary, the legislation will sunset all of our policy changes in 2024 to protect our state’s AAA bond rating.
“As Chairman of the Committee that handles tax policy, I have always sought to ensure that Virginia keeps taxes as low as possible while funding the core functions of state government and maintained a competitive economic environment,” said House Finance Committee Chairman Lee Ware (R-Powhatan). “Let me dispel a misleading talking point that is sure to be resurrected by those attacking our plan. This plan is not just for the “rich”. Our plan will help the people who power our economy and the hard working Virginians who need tax relief the most.”
“The plan we are offering will responsibly protect the state’s existing revenue streams and AAA bond rating while also fully implementing the federal tax cuts for middle-class families and providing broad tax relief to low-income Virginians,” said House Appropriations Committee Chairman, Chris Jones (R-Suffolk). “The federal tax cuts are responsible for a great deal of economic growth right here in Virginia, but the last thing we need to do is stifle that growth by not fully implementing the tax cuts for more than 600,000 Virginia taxpayers.”