Thursday, February 09, 2006

Virginia Taxes Up 55-percent in 10 Years

Virginia's taxes soared 55-percent between 1994 and 2004 according to the latest census data. Meanwhile, Maryland's tax burden shot up by 46-percent in the same time frame. Virginia's 2004 per capita tax amounted to $1,903, while Maryland's was $2,214. Keep this up and Chichester will get his wish of Virginia being in the same range as Maryland for taxes. This is perhaps the most laughable response from the Kaine administration on this:

A member of Gov. Timothy M. Kaine's Cabinet said the census study is misleading. Secretary of Finance Jody M. Wagner said the numbers do not take into account that much of the state's income tax is used for local funding or the state's car-tax rebate.
Hello? If this person is Secretary of Finance, she either thinks that the public are a bunch of morons or she is a moron herself. The census data was the "average per capita tax." Therefore, the 70-percent car-tax relief is already taken into account in the average and lowers it, not raises it. The average per capita tax rate is calculated not by looking solely at the state income tax, but also at various fees, sales taxes, property taxes, etc. If it weren't for the car-tax rebate, Virginia's per capita tax would be higher, further closing the gap with Maryland. Virginia currently ranks 31st in the nation in rate of taxation while Maryland is 15th. We better get Chichester et al. packing before they put us into the top half (if not quarter) of high-tax states. If he loves Maryland's tax rates so much, instead of trying to remake Virginia into a Maryland clone, perhaps he should just move across the river and enjoy the real thing.


At 2/09/2006 10:09:00 AM, Anonymous Bill Kuster said...

TC, Jody is a very knowledgable and hard working person who did a great job as Treasurer. Let's research the methodology behind this and then I know I will let least say what your saying is right or wrong.

At 2/09/2006 10:35:00 AM, Anonymous Rob Whitney said...

If this tax package passes Riley we will break the top 20.

At 2/09/2006 11:01:00 AM, Blogger Shaun Kenney said...

If this tax package passes Riley we will break the top 20.

All the more reason to fight it tooth and nail.

At 2/09/2006 11:10:00 AM, Blogger Riley, Not O'Reilly said...

Bill, per capita average taxes is pretty clear, especially for someone versed in economics. Perhaps she misunderstood the question, but on its face, the answer is ridiculous. I suspect that they were left scrambling for something in terms of PR damage control given the proposal for a yet another tax increase coming out of this admin. and the GOP senate liberals.

At 2/09/2006 11:23:00 AM, Blogger nickfinity said...

Everytime a study comes out that shows taxes are on the rise or how spending on something is up an incredible amount the supporters of the taxes/spending always say something like this.

It's misleading, the methodology was wrong, it doesn't take into account blah blah blah......

At 2/09/2006 11:27:00 AM, Anonymous NoVA Scout said...

If the calculation is done on dividing revenues by population, the increase will also reflect general increased prosperity. I'm not sure what the methodology was, but I've never expected that, as my income rises, my tax bill will go backwards (not that I'd protest if that happened). What I want is to see steady progress on cutting the percentage of the government (all levels) pinch. Virginia is doing better (particularly in the northern areas) than a number of jurisdictions in terms of economic growth. I would suspect that rising incomes here might affect that per capita number.

There must be some academic bean-counters somewhere who have figured out how the various states rank in terms of "tax take" as a percentage of income (or whatever you use in the denominator to account for hte ad valorem items like real estate and personal property). That would be a meaningful number for me.

At 2/09/2006 11:46:00 AM, Blogger Virginia Centrist said...

"If it weren't for the car-tax rebate, Virginia's per capita tax would be higher, further closing the gap with Maryland."

That's completely untrue.

As you know, the state basically replaced 70% of the car tax collections with a General Fund expenditure. In essence, the car tax was a revenue neutral maneuver. It's probable that the state made up for the tax cut with other tax and fee increases, or perhaps they made up for it by for-going a tax cut...

At 2/09/2006 12:20:00 PM, Blogger Riley, Not O'Reilly said...

You say that is completely untrue, but then say something probably happened to back up that assertion rather than offering a specific fact.

I'm looking at the bottom line in terms of what the per capita average is, which is what is being discussed here. The car tax rebate may be revenue neutral to the state, but not to your average taxpayer.

At 2/09/2006 12:24:00 PM, Blogger Virginia Centrist said...

I wrote a post on this..

At 2/09/2006 02:44:00 PM, Blogger Riley, Not O'Reilly said...

Very insightful:

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The requested URL was not found on this server. Please visit the Blogger homepage or the Blogger Knowledge Base for further assistance.

At 2/09/2006 04:43:00 PM, Anonymous Bill Kuster said...

ok, so far Virginia state government says this:

"Virginia’s Tax Structure
Virginia consistently ranks in the top 20 percent of the states having the lowest tax burdens. The highest tax rate for corporations is 6 percent and the top tax rate for individual income tax is 5.75 percent. Based on 2002 data, the state and local burden for Virginia is $95 per $1,000 of personal income. This is $9 below the national average of $104 per $1,000 of personal income"


Also, the Times article clearly states local taxes were not included, so that would distort Virginia's record. I'm going to keep researching as I think we should at least all agree what the current facts are.

At 2/09/2006 04:56:00 PM, Anonymous Bill Kuster said...

Here is another site:

It has a great explanation about how the Census tables cited in the story are misleading. Please take a look at Virginia's 2005 burden. We rank 34th (1 being highest tax burden). Although we are 15th in Federal taxation and 17th in state taxation (basically because from an income perspective we are a high income state-15th I believe), but with local rates included we are near the bottom.

TC, could you please issue an apology for your comments about Mrs. Wagner now.


At 2/09/2006 04:57:00 PM, Anonymous Bill Kuster said...

Riley, please check the new data here:

This would include all of the tax increases.

At 2/09/2006 04:58:00 PM, Blogger Riley, Not O'Reilly said...

Wrong. The only local taxes not included were the Washington, D.C. numbers because they're not available yet. MD and VA's per capita calculations did include all taxes, including local.

The data from Virginia's web site is old. They're citing 2002 numbers. This is new census data from 2004 -- post Marky Mark & The Funky Bunch's tax hike.

At 2/09/2006 04:59:00 PM, Anonymous Bill Kuster said...

Riley, again I would believe the Tax Foundation to be a neutral source and they completely debunk these census figures, do you agree?

At 2/09/2006 11:21:00 PM, Blogger Riley, Not O'Reilly said...

Well, if you want to look at the Tax Foundation, this is what they say on the site you sent me to:

Census also ranks combined state-local tax collections after it has amassed the local data (see here). This is closer to the Tax Foundation rankings, which take the additional steps of projecting collections into the current year, counting out-of-state tax payments in the state of residence instead of the state of collection, and dividing total tax payments by total income to calculate the "burden."

The study I cited (which did take into account all state and local taxes) rated Virginia 31st while Tax Foundation ranks it 34th (fairly consistent.) When Tax Foundation adds Fed. taxes to the State and Local taxes in VA, they rank us as 17th. The Tax Foundation ranks MD 17th for state and local taxes (Census study ranked them 15th, again pretty consistent with the Tax Foundation number) and 15th when Fed taxes are included. So, if anything, the Tax Foundation DOESN'T debunk the census numbers, but bolsters them.

Tax Foundation is a good group. I know their President, Scott Hodge, from when I worked at Citizens for a Sound Economy years ago.

At 2/10/2006 12:58:00 AM, Anonymous Bill Kuster said...

Right, so how can you be arguing Virginia is anywhere near a high tax state when we are eight ranked 19th or 16th in lowest tax burden? We're freaking 15th in income!

TC, still waiting for your apology

At 2/10/2006 01:04:00 AM, Anonymous Bill Kuster said...

ok, had my figures wrong there. We're 34th in tax burden taking into account state and local taxes. It's only when federal taxes are accounted for - which is almost exactly proportional to income (we're 15th and 15th in federal tax burden) do we come up to 17th overall. We are still below the average state/local tax burden and overalltax burden average.

So, if anything the data shows that our income has skyrocketed which is why the tax burden has also.


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