RICHMOND. Va. – State senators and delegates will return to the capitol next Wednesday with all eyes on what bills and budget will be passed this session.
Gov. Glenn Youngkin unveiled a budget proposal back in December that calls for significant income tax cuts and increases in state sales and use tax.
Virginia operates on a two-year budget that is amended annually, the “Unleashing Opportunity” budget presented by Youngkin represents the governor’s first crack at crafting a spending plan.
Youngkin has heavily emphasized tax reduction throughout his administration, and the issue is the centerpiece of his budget proposal.
He is calling for a 12% cut in income taxes across the board.
“All tax brackets, the lowest bracket of 2% reduced to 1.75%, all the way to the highest bracket of 5.75% reduced to 5.1%,” Youngkin said when addressing the state’s joint money committees.
To partly offset that loss in state revenues, the governor is proposing to increase the state’s sales and use tax from 4.3% to 5.2%, as well as expand the base of goods and services the tax applies to.
“Virginia has always taxed goods, and over the last decade, the definition of goods has evolved into new economy goods like software packages, digital downloads, streaming music and videos, cloud storage and other electronic media, on which, today, Virginia collects nothing,” Youngkin said.
Democrats have already pushed back against the tax changes. Those in the Senate call the budget “absolutely disgraceful” and “a slap in the face of our most vulnerable individuals.”
While not included in his budget plan, the governor urged lawmakers to work to permanently eliminate the car tax.
“While I’m addressing taxes, there is one topic that is not included in my budget submission. And that is the single most hated tax in Virginia the locally-imposed personal car tax. Eliminating it permanently is a complicated, yet worthy aspiration,” Youngkin said. “The Car Tax belongs in the trash can not in your mailbox.”
You can read Gov. Youngkin’s full budget proposal here.