The Commonwealth Institute: What Would a Cut to the Top Individual Income Tax Rate Mean for Virginians?
ITEP Work in ActionA proposal to eliminate Virginia’s top individual income tax rate would overwhelmingly benefit the state’s wealthiest residents, who already spend far less of their household budgets on state and local taxes than any other group. Nearly 40 percent of Virginia taxpayers would see no reduction in their taxes under the plan and most of the rest would see only minor savings.
Similar income tax cut proposals were introduced this past legislative session in Virginia as part of the debate surrounding transportation funding and tax reform efforts. In addition, similar proposals have been or are being considered in other states such as North Carolina, Oklahoma, Kansas, and Louisiana. This issue brief examines the impacts of a top rate reduction with particular focus on how it would affect low- and moderate-income Virginians.