5 questions about Virginia’s tax debate

1. What tax increases are Virginia Democrats proposing?

Democratic lawmakers have introduced bills to raise taxes on millionaires (creating new brackets with rates up to 10% for those earning over $1 million), impose a 3.8% tax on investment income, add an 11% excise tax on firearms and ammunition manufacturers and expand sales taxes to services like gym memberships, nail care, tattoos, dog grooming, dry cleaning and landscaping. Some proposals also target retail delivery services in Northern Virginia.

2. Why are Republicans criticizing these proposals?

Republicans argue the tax increases contradict Gov. Abigail Spanberger’s campaign message focused on affordability and helping families struggling with rising costs for energy, groceries, and other essentials. House Minority Leader Terry Kilgore said putting new taxes on Virginians “is just the wrong way to approach affordability,” while other Republicans note the state has run budget surpluses for years, making tax increases unnecessary.

3. How is Ms. Spanberger responding to the criticism?

Ms. Spanberger has not taken a position on most of the proposed tax increases and did not mention taxes in her inaugural address. Her office points to more than a half-dozen bills advancing as part of her affordability agenda, including efforts to reduce heating and energy costs and preserve affordable housing. She said her administration is “focused on working with our partners in the General Assembly to lower healthcare, housing, and energy costs for Virginians.”

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4. What do Democrats say about the tax proposals?

State Sen. Schuyler VanValkenburg called the criticism “noise” from “disingenuous political actors” and predicted that when the session ends, the final budget and tax policies will “reflect our values of helping the working and middle class.” Delegate Dan Helmer said there’s “a selective narrative going on right now that is not focused on the actual bills that are passing the legislature.”

5. Why does this debate matter politically?

The disconnect between Ms. Spanberger’s affordability message and her party’s tax proposals gives Republicans what political science professor Mark Rozell calls an “easy target” that “undercuts the Democratic message of focusing on affordability.” Spanberger won decisively in November as Democrats expanded their House majority and control both chambers, but the tax debate threatens to complicate her governing agenda early in her four-year term. 

Read more: Virginia Democrats go all in on tax hikes after campaigning on affordability