Pass the turkey, hold the taxes

By Paige Winfield Cunningham on November 19, 2009
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Dry turkey leftovers haven’t hit our fridges yet, but the steady stream of stories about budget cuts make me feel like I’m chewing on the same tiring news over and over. Today we’ve got a $10 million shortfall in Richmond, a $1.6 billion shortfall for Virginia and a $84 million potentially slashed from VDOT’s budget.

And a Virginia study finds that residents earning less than $19,000 a year pay 8.9 percent of their income in state and local taxes while those making more than $1.5 million a year pay 6.3 percent.

Matthew Gardner, executive director of the institute, said the main reason for the unfairness of the Virginia tax system is the state’s reliance on sales and excise taxes. The sales tax on food was lowered by 2 percentage points to 2.5 percent in 2004, when Gov. Mark R. Warner pushed through a $1.4 billion tax increase.

Virginia’s income tax is the same 5¾ percent for all taxpayers with income of $17,000 or more.

But does weighting tax collections on sales over income do more harm to states in economic recession? Some say it does, because people cut down their purchases even if they’re still working. But that doesn’t seem to hold up when you look at Oregon, which levies no sales tax and raised income taxes to the highest in the nation this year. Despite this, the state faces a $3.8 billion deficit for the next two years.

Another morsel for today: a very cool map from our friends at the Virginia Public Access Project showing the Republican/Democrat votes per district.

Finally, something unrelated but which is actually related to nearly everything in my life: a way to spend even my sleeping hours with the beloved gmail. Feel free to mail this to me.


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