Governor Northam’s new backdoor tax is about to hit Virginia, and it could drain thousands from your family’s tax return.
And because of how it works, middle-class families will be hit the hardest.
The worst part is, the tax appeared without a single vote, motion, or signature on the public record.
Northam’s Backdoor Tax Will Pry an Extra $600 Million from Virginians
Democrat Governor Ralph Northam has failed to fix an issue in the tax code.
The move will cost Virginia taxpayers and will soon take effect unless action is taken before next year.
You see, when Republicans in Congress passed the Tax Cuts and Jobs Act in 2017, they doubled the federal standard deduction.
Many Americans saw a boost to their paychecks.
And come tax season, many more will enjoy a larger tax return.
But that may not be the case if you live in Virginia.
Virginia requires taxpayers to take the same deduction status for state taxes as they do for federal taxes.
That means more of what Virginians earn may be vulnerable to state taxes.
In fact, when the federal deduction for married couples filing jointly jumped from $12,700 to $24,000, Virginia’s remained at just $6,000.
This could cost Virginia families thousands in larger tax bills.
That’s because this is effectively a backdoor method of taxing up to an extra $18,000 of income.
This bigger tax bill wouldn’t happen if Virginia matched the federal level.
And typically, the Commonwealth has more closely matched the federal standard deduction, which prevents folks from getting caught in the middle.
But Northam failed to make that change this year, and the result is pushing a larger chunk of Virginian’s paychecks into state coffers.
And since wealthy income earners typically itemize on their forms they won’t be effected.
This deduction gap will hit middle-class families the hardest.
The Backdoor Tax is “Disingenuous at best, dishonest at worst”
“I believe it is disingenuous at best, dishonest at worst if officials in Richmond choose to do nothing and accept and spend this tax windfall to the state,” Virginia resident David Stadelmyer told Watchdog.org.1
Stadelmyer is one of the Virginians who will be hit by this backdoor tax in 2019.
He recommends that Northam call a special session to resolve the issue before the year is up.
But the Democrat Governor is sending the opposite signal.
Northam announced he plans to use the backdoor tax to pay low-income earners up to $300 if they qualify for the Credit for Low Income Individuals (CLI).
On paper, this amounts to a new income redistribution plan.
Delegate Richard Bell (R-Staunton) opposes the plan on those grounds, explaining that Northam is unfairly penalizing the working middle-class.
“Unless Virginia raises its own standard deduction significantly, many folks will be faced with an increased tax bill from the state that will more than offset any savings in the federal tax reform plan,” Del. Bell told Watchdog.org.
“That is simply unacceptable to me.”
What do you think?
Should Virginia oppose Northam’s backdoor tax? Or is Northam’s plan good for Virginia?
Leave your thoughts in the comments section below.