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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Henrico Schools to host College and Career Night Nov. 1


Students of all ages are invited to investigate options for life after high school at Henrico County Public Schools’ 2017 College and Career Night. The annual countywide event offers a chance to talk with representatives of more than 100 universities, colleges and professional programs, as well as about 50 representatives of career options such as businesses and branches of the military.

College and Career Night will take place Wednesday, Nov. 1 from 6 p.m. to 8 p.m. at Henrico High School, 302 Azalea Ave. > Read more.

Business in brief


Henrico-based nonprofit Commonwealth Autism recently received the Standards for Excellence Institute’s Seal of Excellence for successfully completing its accreditation program. Commonwealth Autism voluntarily opened itself to analysis by a peer review team during the last 18 months that examined the organization’s compliance with the “Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector.” These standards cover areas such as: mission, strategy and evaluation; leadership – board, staff and volunteers; legal compliance and ethics; finance and operations; resource development; and public awareness, engagement and advocacy. Commonwealth Autism was one of six organizations in the Richmond region to be recognized and the first in the region to achieve full accreditation. In addition to this accreditation, Commonwealth Autism is recognized as an Accredited Charity with the Richmond Better Business Bureau and holds accreditation from the Code of Ethics for Behavioral Organizations (COEBO). > Read more.

Purify Infrared Sauna opens at GreenGate


Purify Infrared Sauna recently opened its second Henrico location at GreenGate Shopping Center in Short Pump.

Owner Mary Woodbridge opened her first Purify location on Patterson Avenue in July 2015. The new store is located at 301 Maltby Boulevard, Suite C, west of Short Pump Town Center. > Read more.

Henrico Master Gardener training program accepting applications through Oct. 27


The Henrico County Office of Virginia Cooperative Extension is accepting applications for its next volunteer Master Gardener training program, which provides instruction in all aspects of horticulture.

Applications for the 2018 training program will be accepted through Friday, Oct. 27. Classes will be held from 9 a.m. to 12:30 p.m. Tuesdays and Thursdays from Jan. 16 through March 22. > Read more.

Henrico Schools to host Oct. 30 job fair


Henrico Schools will host a job fair Oct. 30.

The event, to be held from 10 a.m. to 2 p.m. at the Fairfield branch library, is designed to attract potential full-time and substitute registered nurses, instructional assistants, bus drivers and school nutrition workers. > Read more.

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Learn the most important things children need from parents and easy ways to implement them on Sunday afternoons in October at the Gayton Kirk Presbyterian Church, 11421 Gayton Rd. The parenting classes will be taught using the resources of researcher Brene Brown. Parents will study using the video series from Brown’s “The gift of imperfect parenting: a wholehearted revolution.” The classes, which are free, will take place from 1 p.m. to 2 p.m. A brunch will open the classes at 12:30 p.m. Age appropriate story time, activities and music will be available for children. For details, call 741-5254 or visit http://www.thegaytonkirk.org. Full text

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