Virginia gubernatorial candidate Tom Perriello, a former Democratic congressman, is calling for a tax increase on the wealthy to fund a platform that includes universal pre-kindergarten and free community college.
Perriello on Friday said he wants to increase taxes on income over $500,000, as well tax services such as lobbying and private jet travel and make it harder for corporations to minimize their tax burden. He’s also proposing a $500 child care tax credit and to allow the working poor to get tax refunds through the state’s earned income tax credit.
A Perriello spokesman says the campaign estimates the various proposals would generate $1 billion in additional state revenues each year.
Virginia currently taxes all annual income above $17,001 at 5.75 percent.
If Perriello’s proposal becomes law, Virginia would tax income between $500,000 to $1 million at 6.75 percent, and income above $1 million at 7.25 percent.
In his proposal, Perriello identifies several areas of the state budget where he would make modest cuts, including a reduction inthe state lottery’s advertising budget, reducing management costs of the public employee pension system and ending the practice of elected officials spiking their pensions by taking higher-paying public jobs at the end of their careers.
He’s also calling for changes to the state corporate tax code to establish minimum taxation and require companies to report income across different subsidiaries to prevent them from paying no taxes even in flush times.
Perriello’s opponent in the June Democratic primary, Lt. Gov. Ralph Northam, has called for a tax credit to enable employers to provide eight weeks of paid leave and a change in the state’s 1.5 percent grocery tax, which he has called “regressive.” Northam’s campaign said it would release “guiding principles” this week for a commission on tax reform.
Perriello and Northam are meeting in Fairfax Saturday for their first debate.
Any tax increase from a Democratic governor is likely to face resistance in a GOP-controlled General Assembly. Legislative leaders have endorsed Republican gubernatorial candidate Ed Gillespie’s call for an across-the-board reduction in income tax rates, contingent on future economic growth to off-set annual revenue losses of more than $1.3 billion.
Gillespie’s proposal defers key details to the legislature, including cuts to unspecified “wasteful spending” and closing unspecified special interest tax preferences.
Corey A. Stewart, the chairman of the Prince William Board of County Supervisors who is also seeking the GOP nomination for governor, has called for phasing out the income tax entirely and drastically cutting state spending. And the third Republican in the race, State Sen. Frank Wagner (R-Virginia Beach), has blasted his rivals’ calls for tax cuts as as reckless and wants to boost tax revenue for road and transportation projects.
Virginia last increased taxes for transportation in 2013, with the backing of Republican Gov. Robert F. McDonnell and bipartisan support in the legislature.