Clock tick­ing on de­duc­tion pro­posal

Daily Press - - Local News - Dave Ress, 757-247-4535, [email protected]­ly­press.com

Maybe it’s be­cause he’s an ac­coun­tant who’s had to deal with com­pli­cated tax re­turns that Sec­re­tary of Fi­nance Aubrey Layne thinks House Repub­li­cans’ pro­posal to let more Vir­gini­ans item­ize de­duc­tions could cre­ate a headache.

That idea is part of a pack­age Speaker of the House Kirk Cox and House Ap­pro­pri­a­tions Com­mit­tee chairman Chris Jones say would pre­vent a tax in­crease for mid­dle-class Vir­gini­ans.

Their con­cern is that the near dou­bling of the fed­eral stan­dard de­duc­tion — to $12,000 for in­di­vid­u­als and $24,000 for joint fil­ers — will lead many Vir­gini­ans to stop item­iz­ing.

That could mean big sav­ings on fed­eral taxes for some­one who had, for in­stance, been tak­ing $15,000 in item­ized de­duc­tions. But with the state stan­dard de­duc­tion at $3,000 for in­di­vid­u­als and $6,000 for cou­ples, that per­son would face a big­ger state tax bill.

Vir­ginia lets peo­ple item­ize on the state form only when they do on the fed­eral form. That’s be­cause the state re­lies on the In­ter­nal Rev­enue Ser­vice to make sure tax­pay­ers’ de­duc­tions are valid, Layne said.

It would take hun­dreds more state tax de­part­ment em­ploy­ees to check up on claimed de­duc­tions, Layne said. And since the fed­eral stan­dard de­duc­tion in­crease ex­pires af­ter 2024, those em­ploy­ees might not be needed then.

The House pro­posal would also make fil­ing state taxes more com­pli­cated — and one key ob­jec­tive of the fed­eral changes was to re­duce the pain of pay­ing taxes. That’s one con­cern on the minds of some Se­nate Repub­li­cans.

So far, Se­nate Fi­nance Com­mit­tee co-chair­men Thomas K. Nor­ment Jr., R-James City, and Em­mett Hanger, R-Mount Solon, have not joined their House col­leagues in propos­ing any changes to the item­iz­ing rule.

Nor­ment has pro­posed a credit of $150 for in­di­vid­u­als and $300 for cou­ples to off­set any in­crease in state taxes be­cause of the fed­eral law. He also wants to raise the thresh­old for fil­ing state taxes — from $11,950 to $15,000 for in­di­vid­u­als and from $23,300 to $30,000 for cou­ples — to give re­lief to low-in­come Vir­gini­ans.

Demo­cratic Gov. Ralph Northam wants to do that by mak­ing the earned in­come tax credit “fully re­fund­able.”

But that idea is anath­ema to Repub­li­cans, who view it as writ­ing gov­ern­ment checks to peo­ple who don’t pay in­come taxes.

State Sen. Ben Chafin, RRus­sell County, has pro­posed dou­bling the state stan­dard de­duc­tion, and Nor­ment said he ex­pects to see a dozen or so other bills from dif­fer­ent Se­nate Repub­li­cans.

For now, Nor­ment said he’s lis­ten­ing to ideas and look­ing for a con­sen­sus be­fore he starts se­ri­ous dis­cus­sions with House leaders and the gov­er­nor.

But the clock is tick­ing, and as Layne says, there’s plenty of pres­sure on ev­ery­one — in part be­cause it will take an 80 per­cent su­per­ma­jor­ity in a nar­rowly di­vided Gen­eral Assem­bly to make any changes in time to help tax­pay­ers this year.

Chip­ping away at the 21-day rule

For state Sen. Bill Stan­ley, a lawyer-leg­is­la­tor from the Blue Ridge foothills, the story of four Nor­folk sailors im­pris­oned for years on the ba­sis of a false con­fes­sion for a 1997 rape, was one more cau­tion­ary tale about Vir­ginia’s 21-day rule.

That’s the le­gal rule that says judges can’t con­sider new ev­i­dence of in­no­cence more than 21 days af­ter an ac­cused is con­victed. The only ex­cep­tion is DNA ev­i­dence.

“All you have to do is look at the Nor­folk Four” to see the prob­lem, Stan­ley says. The four were par­doned in 2017, while Vir­ginia and the city of Nor­folk paid them nearly $8.5 mil­lion. Stan­ley reck­ons the state got off lightly, con­sid­er­ing the years of free­dom and fam­ily life the four missed.

Past ef­forts to change the 21-day rule have fal­tered, but Stan­ley thinks he has a chance this year.

In part that’s be­cause his pro­posal is lim­ited in scope.

It only al­lows con­victs to ask for a re­view of their cases if new sci­en­tific ev­i­dence that could show their in­no­cence comes to light, or if the sci­en­tific ev­i­dence used to con­vict them has been dis­cred­ited. Bite mark ev­i­dence is one ex­am­ple — sci­en­tists have shown it’s un­re­li­able be­cause wounds in peo­ple’s flesh of­ten swell or stretch.

And un­der Stan­ley’s bill, peo­ple who pleaded guilty — an over­whelm­ing ma­jor­ity of those in prison — would not be also to ask for a re­view. The only peo­ple el­i­gi­ble would be those who pleaded not guilty or en­tered an “Al­ford plea,” mean­ing they didn’t ad­mit guilt but ac­knowl­edged there was enough ev­i­dence for con­vic­tion.

Stan­ley’s pro­posal in­cludes more caveat: Ask­ing for a re­view of your con­vic­tion wouldn’t nec­es­sar­ily get you one. His bill calls for the state Court of Ap­peals to con­sider re­quests and either dis­miss them or in­ves­ti­gate fur­ther, pos­si­bly re­sult­ing in a new trial.

“This isn’t go­ing to open the flood­gates” at Vir­ginia pris­ons, Stan­ley says.

Vir­ginia’s 21-day rule is among the tight­est lim­i­ta­tions in the coun­try, and the prin­ci­ple is to bol­ster courts’ author­ity and pub­lic con­fi­dence in the jus­tice sys­tem.

“I want to be sure we get it right ... I’ve been prac­tic­ing law for 25 years and the one thing about the sys­tem I know for sure is that it is im­per­fect, and be­cause it is im­per­fect, we can’t be tied down try­ing to cor­rect mis­takes,” Stan­ley says. “This is about free­dom and peo­ple’s lib­er­ties.”

Non­com­petes chal­lenged

A lawyer-friend spe­cial­iz­ing in Vir­ginia em­ploy­ment law — which says em­ploy­ers can pretty much fire work­ers for any rea­son or no rea­son at all — told Del. Schuyler Van Valken­burg, DHen­rico County, about a hair­dresser client who ended up mov­ing to an­other state be­cause she was sub­ject to a non­com­pete agree­ment.

Meant to pro­tect a com­pany’s trade se­crets, such agree­ments are typ­i­cally part of con­tracts that pro­tect high-paid em­ploy­ees from ar­bi­trary fir­ing, of­ten in­clud­ing a nice golden-hand­shake sev­er­ance pack­age.

But Van Valken­burg won­dered ex­actly what kind of trade se­cret about hairstyling might need to be pro­tected, es­pe­cially when his friend’s client had no pro­tec­tion her­self in an em­ploy­ment con­tract. She moved to an­other state be­cause her non­com­pete agree­ment barred her from cut­ting and styling hair any­where in Rich­mond.

As he learned more, Van Valken­burg won­dered what was be­ing pro­tected when non­com­pete agree­ments hin­dered sand­wich-mak­ers, gym train­ers, baris­tas or ar­borists in chang­ing jobs for bet­ter pay or hours or less ar­du­ous com­mutes.

He sus­pected the goal might be to pro­tect against a re­quest for a pay hike, rather than to shield a trade se­cret.

That’s why he thinks Vir­ginia should join a grow­ing num­ber of states that ban em­ploy­ers from en­forc­ing non­com­pete agree­ments when no trade se­crets are in­volved. Vir­ginia has a sep­a­rate law pro­tect­ing trade se­crets.

Some fairly broad bans on non­com­pete agree­ments have won bi­par­ti­san sup­port in Cal­i­for­nia, North Dakota and Ok­la­homa. Nar­rower ones are the law in Hawaii, New Mex­ico and Mas­sachusetts. Van Valken­burg’s bill would ap­ply to peo­ple whose av­er­age weekly earn­ings are less than the state’s av­er­age.

Van Valken­burg ar­gues his is a pro-busi­ness and pro-em­ployee bill. Non­com­pete agree­ments hin­der other busi­nesses from hir­ing ta­lented staff and keep em­ploy­ees from ven­tur­ing into start­ing their own busi­nesses.

But his law is a new idea in Vir­ginia. Ni­cole Ri­ley, a lob­by­ist for the Na­tional Fed­er­a­tion of In­de­pen­dent Busi­ness, said she wants to study the mea­sure and con­sult with mem­bers be­fore tak­ing a stance on it.

DAVE RESS Shad Plank

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