Yesterday, VA AG / gubernatorial candidate Ken Cuccinelli put forward his tax plan to spur economic growth.
The Cuccinelli Economic Growth & Virginia Jobs Plan
Virginia Republican Gubernatorial Candidate Ken Cuccinelli’s Economic Growth & Virginia Jobs Plan is designed to unleash the spirit and ingenuity of Virginia’s innovators, entrepreneurs and job creators; empower middle class families by allowing them to keep more of the paychecks they’ve earned; and reduce government barriers that crowd out economic opportunity in the private sector.
Specifically, the plan includes the following proposals:
- Reduce the individual income tax rate from 5.75 percent to 5 percent over four years;
- Establish a Small Business Tax Relief Commission with the following strategic goals:
- Eliminate or reduce the harmful effects of the Business Professional Occupational License (BPOL) Tax, the Machine and Tool (M&T) Tax, and the Merchants Capital (MC) Tax, while maintaining local government revenue;
- Reduce the Personal Income Tax and the Corporate Income Tax;
- Identify and eliminate outdated exemptions and loopholes that promote crony capitalism;
Ensure state government growth does not exceed inflation plus population growth;
Reduce the corporate income tax from 6 percent to 4 percent.
I am glad to see that the very first major policy proposal he has put forward addresses the need for tax reform and its relation to economic growth. Overall, this plan is a good start towards cleaning up our tax code and eliminating all the crony capitalist loopholes that have corrupted it over the years that in turn necessitate higher tax rates for all.
This must be the start, though, as many other states are moving in the direction of completely eliminating their personal and corporate income taxes. Seven states currently have no state income tax, two additional states only tax dividends and interest income, and three more states are currently looking to eliminate their state income tax.
Of particular concern to Virginia should be its neighbor to the south, North Carolina. That state is engaging in its own tax reform right now with the elimination of the income tax as one of the options. Another option, floated just yesterday, would reduce their income taxes, but Cuccinelli’s plan would keep Virginia ahead of the curve.
Under the proposal: The state’s 7.75 percent personal income tax rate for the top bracket would gradually drop to 4.5 percent over three years, and likewise the 6.9 percent corporate income tax would fall to 6 percent. The estate tax, paid by only the wealthiest taxpayers in 2010, would be eliminated, and the business franchise tax would see a 10 percent reduction.
So kudos to Ken Cuccinelli’s plan. He has put forward a solid plan that will get Virginia tax policy moving in the right direction.