January 22, 2009
CONTACT:
John Golden, (804)698-1045 or (703)549-3203
Today Virginia House of Delegates Democratic legislators announced a middle class and small business tax relief act that would repeal sales tax on food, cut middle class income taxes, and repeal corporate income tax on small businesses.
Delegate David Englin (D-Alexandria), Delegate Joe Morrissey (D-Henrico), and Delegate Dave Marsden (D-Fairfax), joined by a number of copatrons, today announced the middle class and small business tax relief act to ease the burden on Virginia families and small businesses while protecting critical funds for education and transportation.
"This bill is an important reform that will help people now and will strengthen our economy for the future," said Delegate Englin. "All across Virginia, middle class families need help, and businesses struggling to keep people in their jobs need help. By cutting taxes on the families and small businesses who need it most, while taking modest and fiscally responsible steps to protect money for education and transportation, this bill is a step forward for all Virginians."
"In this difficult economy, with so many Virginians struggling to make ends meet, we need to fight for policies that will make life easier for hard working middle class families and small businesses," said Delegate Marsden. "We're ready to work in a bipartisan way to make that happen."
"It gives me great pleasure to join my Democratic colleagues to propose both middle class as well as small businesses tax relief," said Delegate Morrissey. "My commitment to cutting income tax for the middle class is absolute and unconditional. I urge my Republican colleagues in the House of Delegates to put action behind rhetoric and join us in this bold initiative to provide middle class tax relief."
The proposed middle class and small business tax relief act will repeal the state sales tax on groceries, repeal the corporate income tax for businesses making less than $100,000 per year, and cut the personal income tax for Virginians making between $17,000 and $75,000 per year, all while protecting existing money that is dedicated to public education and transportation.
Eliminating the current 1.5 percent state sales tax on food will provide roughly $230 million per year of tax relief for 7.6 million Virginians in nearly 3 million households. Eliminating the corporate income tax on businesses making less than $100,000 per year will provide $10 million in tax relief to 22,000 businesses. Lowering the personal income tax rate to 5.6 percent for people making between $17,000 and $75,000 per year will provide $130 million in tax relief to more than 1.4 million Virginians.
Currently revenue from one percent of the state sales tax on food is dedicated to local governments for public education, and revenue from the remaining one-half percent is dedicated to the Transportation Trust Fund.
"It was absolutely critical to craft this bill in a way that provides the tax relief while protecting those vital resources," said Delegate Englin.
To accomplish that, the proposal would raise the income tax rate on people making more than $400,000 per year by 1.1 percent, affecting roughly 30,000 Virginians, or the wealthiest four-tenths of a percent of the state's population. Moreover, the legislation is written to ensure that there is no change in the amount or the timing of the current funds that go to local governments for public education and to the Transportation Trust Fund.
