RICHMOND, Va. (WRIC) — Democrats in the Virginia Senate have unceremoniously put an end to Governor Glenn Youngkin’s plan to cut corporate and income tax rates.
The two bills, one to cut the top income tax rate by 0.25% and one to cut the corporate tax rate by 1%, passed the Republican-controlled House of Delegates last week. The proposals have been a key part of Youngkin’s budget proposals this year, but faced heavy opposition from Democrats who criticized them as corporate handouts.
Over the next two years, the proposals would mean a tax break of $534.5 million for corporations in the commonwealth, and reduction of $466 million in taxes collected from individuals.
A Virginia Senate committee killed the bills with little debate, likely spelling the end for this version of the governor’s proposal.
House Republicans had championed the bill as a way to attract people to the state, rejecting a Democrat-sponsored substitute that would have increased deductions but kept tax rates the same.
Virginia’s income tax has been the focus of reform efforts for years, as 47% of residents pay the top tax rate because income brackets haven’t been updated since 1990. A recent General Assembly report recommended reforming the tax brackets and suggested options such as a millionaire’s tax and adjusting the brackets for inflation.
