Mr. Youngkin, who made a fortune in private equity, says Virginia’s economy is “in the ditch” — an assertion flatly contradicted by a tsunami of evidence to the contrary. And, like his predecessors, he claims lower tax bills are the elixir that would cure what ails the commonwealth.
Specifically, Mr. Youngkin, when asked this spring if he hopes to reduce or eliminate Virginia’s income tax, replied as follows: “We are absolutely focused on not just getting our state income tax down, but how can we in fact eliminate it?”
That very baloney was also peddled by Republicans Ed Gillespie, who lost the governor’s race in 2017; Corey Stewart, who narrowly lost the GOP primary that year to Mr. Gillespie; and former state attorney general Ken Cuccinelli, who lost in 2013. In each case, the conceit was that cutting taxes would attract new businesses to Virginia and help them grow faster. But what businesses, and which employees, would flock to a state that would decimate its tax base, thereby starving schools, roads, health care, parks, prisons and police of resources?
Here are the facts. Virginia’s individual income tax — the target of Mr. Youngkin’s fever dream — accounts for 72 percent of the state’s $43.5 billion of revenue in the current two-year general fund budget. (Most of the rest comes from sales, corporate and other taxes.) Take an ax to the income tax, and funding for vital services is decimated.
That’s not theory; it’s been tried, recently — in Kansas and Louisiana, in both cases by Republican governors who promised that cutting taxes would generate higher growth. In fact, the predictable result was that revenue shriveled, and so did state support for services Democrats and Republicans alike care about. In fact, eliminating Virginia’s income tax is a perfect recipe for defunding the police, the very policy Mr. Youngkin (falsely) accuses Virginia Democrats of favoring.
The GOP tax-cutting experiments in Kansas and Louisiana were disasters. In both cases, the damage was severe, and the tax cuts were rolled back.
What makes Mr. Youngkin’s proposal even more preposterous is that Virginia’s economy is robust. Unemployment is significantly below the national average. Residents’ tax burden is squarely in the middle of the nationwide pack. The state government is running a $2 billion budget surplus, boasts a AAA bond rating (putting it in the top dozen states nationally) and is regularly ranked among the best states for business.
If Virginians want to see an economy run “into the ditch,” Mr. Youngkin’s plan would do the trick.