Gov. Glenn Youngkin’s $1 billion tax relief program passed the Republican-controlled House of Delegates on Tuesday, while the governor continued campaigning for measures that now face a tougher ride with the Democratic majority in the state Senate.
“Virginians are still overtaxed, they deserve to keep more of their hard-earned paychecks and today’s significant move by the House of Delegates means Virginians are one step closer to additional relief," Youngkin said in a statement.
Youngkin’s program calls for cutting the top rate for individual income taxes from 5.75% to 5.5%, while boosting the standard deduction from $8,000 to $9,000 for single filers and from $16,000 to $18,000 for joint returns.
His business tax relief includes cutting the corporate income tax rate from 6% to 5% and creating a 10% credit targeted for small business — a feature Youngkin stressed earlier Tuesday in a speech at the National Federation of Independent Business.
“When we see people moving away, they are voting with their feet,” he told the small business-oriented group.
Youngkin has repeatedly said tackling Virginia's high cost of living is a top priority. More people move out of the state than move in, often headed for lower- or no-income tax states to the South, which Youngkin has repeatedly said is one of his top concerns — high cost of living.
Democrats say the state has too many unmet needs the $1 billion program could address.
They include some $20 billion in school construction needs and state school staffing standards that have not been fully funded since the Great Recession, Del. Sally Hudson, D-Charlottesville, told the House during a muted debate on the corporate tax cuts.
House Majority Leader Terry Kilgore, R-Scott, said: “We want to give money back to taxpayers, it is not our money, it is theirs."
Youngkin says the state’s projected $3.6 billion surplus and projections of even larger future surpluses mean Virginia can afford tax relief and still have resources needed to make critical investments.
Senate bills that would implement the relief program are pending before the Senate Finance Committee, with its 11-5 Democratic majority, and are on its agenda for Wednesday.
The House bills must still go before that committee, as well.