In the first full week of proceedings in the Virginia state legislature, Republicans are primed to settle one of the biggest topics of the 2019 General Assembly session – tax reform. Governor Ralph Northam (D) presented his 2019 budget amendments to committees in Richmond in early January, proposing $2.2 billion in new state spending, $1.6 billion of which would be recurring after his term ends.
Rising for a point of personal privilege around noon on the floor of the lower chamber, House Majority Leader Todd Gilbert (R-Shenandoah) spoke on the priorities of the House GOP caucus in this year’s short session.
“In light of the governor’s speech the other night…we [Republicans] were all struck by the checking off of the boxes of issues that seem to play only to an increasingly liberal, progressive base,” Delegate Gilbert said.
On the issue of taxes, the divide between Republicans and Democrats in the statehouse could not be any wider.
Gilbert remarked on the 2018 session, in which the GOP, with just a one-member majority in both the House and Senate, was able to fend off over $770 million in tax increases from the liberal party. Though, Democrats now have their sights set on draining even more from taxpayers through inaction after a massive, Republican-led federal tax overhaul.
The Tax Cuts and Jobs Act, signed by President Donald Trump in December 2017, doubled the federal standard deduction – now $12,000 for single filers and $24,000 for joint filers – a provision designed to benefit the middle class. Like many states, Virginia’s standard deduction is conforming, meaning that it matches the federal deduction.
Democrats have refused to respond to the tax hike directly, instead blaming the Trump Administration and Republicans. The Virginia GOP has pledged to offer an alternative budget which keeps $1.2 billion in the hands of taxpayers, while opposing the Democratic Party’s other plans to subsidize a “refundable” earned income tax credit (EITC) for low-income Virginians.
“To be very clear,” the House majority leader said, “the governor’s proposal to increase taxes on hard-working Virginians is dead on arrival.”
“We are not going to participate in that,” he said. “We are not going to discuss that. That is a non-starter for this caucus, and we are not going to go along with it, and I just wanted to lay down that marker.”
Under the governor’s proposal, a married, home-owning couple each making $55,000 per year would pay $805 more in Virginia income taxes, depending on deductions. By contrast, the GOP-led plan would conform the state’s tax code to the 2017 federal tax reform law, also increasing the standard deduction from $3,000 to $4,000 for individuals, and from $6,000 to $8,000 for couples. Under the GOP-backed plan, this family would receive $115 in tax relief.
Standing against those that advocate for more state government spending and leveling the economic playing field among Virginians, Gilbert added, “this is no a tax cut for the rich, as is so often the predictable refrain of the opponents of tax reform.”