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.
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Virginia raises a toast to George Washington’s whiskey


George Washington is recognized as the father of our country, but with a bill signed into law by Gov. Terry McAuliffe, Washington also will be recognized under another title – distiller of Virginia’s official liquor.

SB 1261, sponsored by Sen. Adam Ebbin of Alexandria, adds a “state spirit” to the list of the commonwealth’s official emblems and designations and crowns George Washington’s rye whiskey with the title.

The bill, which McAuliffe signed last week, highlights George Washington’s contributions to the culture of Virginia as “a native son of Virginia born on February 22, 1732, in Pope’s Creek”; “the first American president, commander of the Continental Army, and president of the Constitutional Convention”; and “a model statesman ... universally acknowledged as the father of our nation.” > Read more.

McAuliffe vetoes 6 more bills; GOP calls him ‘disengaged’


Gov. Terry McAuliffe on Monday vetoed six bills, including three Republicans said would help prevent voter fraud but the Democratic governor said would create barriers to voting.

McAuliffe has now vetoed 37 bills from the General Assembly’s 2017 session – and 108 during his four-year term as governor, surpassing any of his predecessors.

Republican legislative leaders say McAuliffe has broken his promise to be bipartisan, calling his office “the most disengaged administration we have ever worked with.” > Read more.

HSWCD to give away tree seedlings Thursday and Friday


Henricopolis Soil and Water Conservation District will hold its annual tree seedling giveaway March 30 at Dorey Park Shelter 1 from 2:30 to 6 p.m., and March 31 at Hermitage High School from 8:30 a.m. to noon.

Studies show that mature trees increase property value, decrease summertime cooling costs by providing shade, slow erosion and reduce flooding. They also provide homes for birds, food for countless creatures, and playgrounds for children. > Read more.

Dog rescued, no one injured in Northside townhouse fire


MAR. 27, 11 A.M. – No one was injured by a townhouse fire that occurred early Monday morning in the 200 block of Knightsmanor Court, near the intersection of Azalea Avenue and Richmond-Henrico Turnpike.

The first Henrico Fire officials were on scene in less than four minutes and found heavy smoke and flames coming from the two-story townhouse. Firefighters from the first-arriving fire engine and ladder truck made their way to the townhome involved in fire and searched for victims through high heat and reduced visibility. > Read more.

Walk, ceremony to observe Crime Victims’ Rights Week

In observance of National Crime Victims' Rights Week (April 2-8), and to honor victims of crime in Henrico County and raise awareness about crime victims' rights and issues, Henrico County Victim/Witness will hold a commemorative ceremony and informative walk April 5. > Read more.
Community

Villa’s Flagler Housing wins national NAEH award


St. Joseph's Villa’s Flagler Housing & Homeless Services was one of three entities to earn the National Alliance to End Homelessness' Champion of Change Award. The awards were presented Nov. 17 during a ceremony at the Newseum in Washington, D.C.

NAEH annually recognizes proven programs and significant achievements in ending child and family homelessness.

Flagler completed its transition from an on-campus shelter to the community-based model of rapid rehousing in 2013, and it was one of the nation's first rapid re-housing service providers to be certified by NAEH. > Read more.

RIR’s Christmas tree lighting rescheduled for Dec. 12


Richmond International Raceway's 13th annual Community Christmas tree lighting has been rescheduled from Dec. 6 to Monday, Dec. 12, at 6:30 p.m., due to inclement weather expected on the original date.

Entertainment Dec. 12 will be provided by the Laburnum Elementary School choir and the Henrico High School Mighty Marching Warriors band. Tree decorations crafted by students from Laburnum Elementary School and L. Douglas Wilder Middle School will be on display. Hot chocolate and cookies will be supplied by the Henrico High School football boosters. > Read more.
Entertainment

Metro Diner to open second Henrico location


Metro Diner, a comfort food concept, will open its second Henrico location next month. The company is accepting job applications for its Libbie Place location at 5626 West Broad Street. The diner concept, known for its fried chicken and waffles, meatloaf, and shrimp and grits, will bring 100 new jobs to the region as it plans to open its doors in April.

The 3,500-square-foot diner located in the Libbie Place Shopping Center will seat more than 100 and serve classic comfort food staples with a twist, such as fried chicken and waffles topped with strawberry butter and a stuffed challah bread French toast with strawberry and blueberry compote. > Read more.

 

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Twin Hickory Library will present “Hop a Trolley Through Richmond History” from 2 p.m. to 3 p.m. Learn about the history of Richmond's electric streetcar system and the parks at the end of the lines through this presentation by The Valentine Museum. This program is part of the Dr. Bob Singer Senior Series sponsored by the Friends of Twin Hickory Library. For details, call 501-1920 or visit http://www.henricolibrary.org. Full text

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