Bipartisan agreement: tax loopholes are draining Virginia's budget
January 26, 2012
The Washington Times reports, "Billions of dollars in tax credits, incentives and exemptions which in many cases were poorly targeted or ineffective have prompted a bipartisan push in the Virginia General Assembly for greater disclosure and better accountability in the state tax code. Delegates David L. Englin, Alexandria Democrat, and Benjamin L. Cline, Augusta Republican, have introduced nearly identical bills that would require newly approved tax credits and deductions to include a sunset date of five years at most. Mr. Cline's bill also would require the state tax commissioner to report the estimated annual revenue loss for each state tax credit scheduled to expire in the next two years."
Progressive Point: $12.5 billion in tax loopholes and giveaways a year is draining Virginia's ability to pay for essential programs. Virginians deserve a balanced budget approach to the state budget that focuses on accountability and eliminates costly and unfair tax loopholes. We cannot afford to keep Governor McDonnell's cuts-only approach that is continuing to impose heavy burdens on our families and local communities, while big corporations dodge paying their share.
There is bipartisan agreement amongst our elected representatives in the General Assembly that reform is necessary for Virginia's economic recovery. Endless tax giveaways are draining investments in our shared future. A fairer and more effective tax system will benefit all Virginians and is a responsible solution that both sides of the aisle can agree on. But despite bipartisan consensus on closing tax loopholes and raising revenue, Bob McDonnell continues to insist on a cuts-only approach that will devastate Virginia's safety net and keep the burden on our communities and families.
Get the Facts:
- Virginia lost $12.5 billion in revenue in 2008 through 187 different tax credits and giveaways that receive little-to-no scrutiny and accountability. (JLARC) This included coal companies receiving $31 million in tax breaks designed to slow layoffs in the industry. Instead, unemployment increased even more quickly than anticipated.
- "The report showed that only 20 of those [tax credits and giveaways] include reporting and evaluation of their cost and effectiveness, while 131 receive no regular oversight." (Richmond Times Dispatch, January 25, 2012)
- Better Choices for Virginia's recently released agenda highlighted four loopholes specifically:
- HB1030: The variety of accounting gimmicks that allowed 64% of Virginia corporations to have no tax liability
- HB1267: A loophole in our tax code that allows corporations to ship profits out of state to avoid taxes
- SB597: The "Amazon Loophole" that gives big online retailers an unfair advantage over Virginia brick-and-mortar businesses
- HB145: A tax break for people who buy yachts