Study: Cut Va. taxes
The rich may be rich and the poor may be poor, but a nonpartisan think tank says there’s a way to eliminate state income taxes on the poorest Virginians while providing as much as a 10 percent tax cut to everyone else.
The Thomas Jefferson Institute for Public Policy on Friday unveiled a plan to restructure Virginia’s tax system – which the group says could generate substantial economic growth.
The nonprofit group’s report recommends slashing certain business taxes and income taxes while expanding the sales tax to currently untaxed services.
“By expanding the current sales tax to most of the industries that do not currently collect it from their end-user individuals, every individual taxpayer can be substantially helped,” said Michael Thompson, president of the Thomas Jefferson Institute.
“The competitive business environment in Virginia can be enhanced, and our state and local governments would not lose a penny.”
The institute, based in Springfield, advocates a philosophy of “limited government, free enterprise and individual responsibility.” Its new economic study, “Tax Restructuring in Virginia: Revenue Neutral Path for Improving Virginia’s Economy,” was prepared by Chmura Economics and Analytics, a Richmond consulting firm.
“Basically, this is a collaborative team effort,” Xiaobing Shuai, Chmura’s senior economist, told reporters during a telephone news conference. “What Chmura Economics did in this study is go through probably 100-plus sales tax exemptions, and then try to estimate the value of those sales tax exemptions.”
A computer model developed by economists at the Beacon Hill Institute, an independent public policy foundation at Suffolk University in Boston, tested various scenarios for overhauling Virginia’s tax system.
Nine economic scenarios were put through the tax model.
“We took Chmura’s numbers, which is a static model that doesn't account for the positive economic benefits of the tax restructuring, and put them in our dynamic model and ran the nine scenarios that you see in the study,” said Paul Bachman, director of research at Beacon Hill Institute.
“The model resolves for new values, and we get new values for jobs, investment and disposable income. What we are doing, in economic terms, is shifting some of the tax burden away from businesses and households in some scenarios and putting it onto an untaxed service sector.”
Virginia currently exempts almost all services, from haircuts to auto repair, from sales taxes.
A major goal of the Thomas Jefferson Institute’s plan is to eliminate three taxes that business owners consider onerous and an impediment to creating jobs:
• The Business Professional Occupation Licensing tax, which is levied on gross receipts.
• The Machine and Tool tax, which is levied on equipment a business buys.
• The Merchants Capital tax, which is levied on a business’ inventory.
Virginia businesses must pay those taxes regardless of whether they make a profit. Thompson called them “job-destroying taxes,” saying they discourage businesses from expanding and hiring more employees.
The Thomas Jefferson Institute initiated its study to see if it was possible to eliminate those taxes and restructure the state’s tax system in a revenue-neutral manner that could improve Virginia’s economy.
The nine scenarios outlined in the study range from a relatively small impact to a radical overhaul.
The first scenario, for example, would simply eliminate the BPOL, M&T and Merchants Capital taxes and make up the revenue by extending the sales tax to certain currently untaxed services. The study said this would create 900 private-sector jobs.
Other scenarios suggested not only eliminating the three business taxes but also eliminating the lowest income tax bracket and cutting other personal income tax rates. Under these scenarios, the sales tax would be expanded to more services. In some scenarios, the sales tax would be cut, too. (It’s currently 4 percent for the state and 1 percent for local government.)
The scenarios did not specify exactly what types of services would be taxed. The study acknowledged that taxing medical bills, health insurance premiums, private school tuition and financial fees probably wouldn’t fly.
The more extensive scenarios would create at least 40,000 jobs, the study said.
For the third consecutive year, the Canterbury Recreation Association in Short Pump donated the most meals to the fourth-annual "Dunk Hunger" campaign, which raises money and food donations for FeedMore's Central Virginia Food Bank. Swim teams and community pools throughout the region combined to raise the equivalent of 77,404 meals this year, with the Canterbury group earning the Gold Medal, with 17,454 meals contributed.
CRA will earn a winners’ bash Aug. 24 from 3 to 5 p.m. at its pool on Pump Road.
“Our pool has adopted Dunk Hunger into its culture with fun ways to raise food and funds," said Canterbury’s Dunk Hunger chairman Jack McSorley, a Freeman High School junior. > Read more.
The last Rock ‘n’ Roll Summer outdoor concert at West Broad Village, scheduled Saturday, Aug. 22 from 7 p.m. to 10 p.m. in Short Pump, will feature a salute to the upcoming UCI Road World Cycling Championships, coming to the Richmond region next month. As an all-girl band entertains the public with an AC/DC and Foreigner tribute, representatives from West Broad Village will accept donations of children’s new and lightly used bicycles for redistribution to youngsters at the Virginia Homes for Boys and Girls. > Read more.
‘Shaun the Sheep Movie’ surprises, delights
Have people in the United States even heard of Shaun the Sheep? I certainly hadn’t.
I walked into Shaun the Sheep Movie knowing precisely two things about the film: one, it’s the product of Aardman Animations, the stop-motion animation studio responsible for Wallace & Gromit and Chicken Run. And two, it’s got a cartoon sheep in it. That’s it.
But walking out, I was a total Shaun the Sheep convert – blown away by Shaun the Sheep Movie’s unassuming, good-natured, sheepy charms. (Also, it turns out Shaun the Sheep – originally a TV series – used to air on the Disney Channel. Maybe I’m just out of the loop). > Read more.
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