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.
Bail Bonds Chesterfield VA

Crime Stoppers’ Crime of the Week: Sept. 18, 2017


Crime Stoppers is seeking information about a shooting in Richmond that resulted in an injured child and the murder of an adult.

At approximately 10:21 p.m., Sept. 9, Richmond Police were called to the 3200 block of 5th Avenue for a report of a person shot. They quickly located two victims suffering from gunshot wounds, a 57-year-old male and a 9-year-old female. > Read more.

Business in brief


Commonwealth Senior Living at the West End, located at 2400 Gaskins Rd., will hold their grand opening on Oct. 3 from 4:30 p.m. to 6:30 p.m. The community recently underwent a multi-million-dollar renovation which included the addition of a new memory care neighborhood, new resident suites, an expanded dining room, and brand-new courtyards and additional outdoor spaces. Commonwealth Senior Living associates will be on site to provide tours of the newly renovated community. > Read more.

Wegmans to sponsor Turkey Trot 10K


Wegmans Food Markets Inc. will become title sponsor of the Richmond Road Runners Club’s annual Turkey Trot 10K, a Thanksgiving Day tradition for many Richmond area runners.

Wegmans and RRRC have signed a three-year agreement whereby the race, beginning in November 2017, will be known as the Wegmans Turkey Trot 10K. RRRC will continue to manage race operations. > Read more.

Publix to open at Virginia Center Marketplace Oct. 11


Publix will open its next Henrico location at 10150 Brook Road in the Virginia Center Marketplace shopping center in Glen Allen Oct. 11 at 7 a.m. The store will host a grand opening ceremony at that time.

The location will be the Florida chain's fifth in Henrico, joining those already open at Nuckols Place and The Shoppes at Crossridge in Glen Allen, The Shops at White Oak Village in Eastern Henrico and John Rolfe Commons in the Far West End. > Read more.

Statewide tax amnesty period underway


Delinquent individual and business taxpayers in Virginia can pay back taxes with no penalties and half the interest from now through Nov. 14, as part of the 2017 Virginia Tax Amnesty Program, which began Sept. 13.

Approved by the 2017 General Assembly, the program assumes collection of $89.5 million for the general fund to support education, health, and public safety, as well as to provide a cash reserve. > Read more.

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September 2017
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The second annual Trey’s Avengers Cornhole Tournament will take place at 1 p.m. at Hurley’s Tavern in Innsbrook. The tournament is a 32-team double-elimination cornhole tournament with all entry fees going to juvenile diabetes research. Two players per team. Entry fee is $50 per team. Each player will receive a drink ticket good for a beer, rail drink or soda. Prizes will be given to first and second place winners. Spectators are welcome and a special kid’s cornhole area will be set up. Trey's Avengers is a family fundraising team for the JDRF One Walk in Richmond, Va. To register or donate, visit http://www.TreysAvengers.com. Full text

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