The Half Sheet: Virginia’s Tax System Is Upside Down

Virginia’s state and local taxes help to shape economic opportunity across the state. That’s because state and local revenues pay for the building blocks of thriving communities: schools, roads, libraries, and other public services. Unfortunately, the current state and local tax system is upside down. Families in Virginia have taxes withheld from their paychecks, and they also pay taxes when they shop at local businesses, buy groceries, or fill their gas tanks. But updated analysis from the Institute on Taxation and Economic Policy (ITEP) shows that Virginia’s low- and moderate-income households pay a higher share of their incomes toward state and local taxes than the highest-income households.

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