Eas­ier tax plan

Daily Press - - Opinion -

Both com­mon­wealth po­lit­i­cal par­ties are wrong re­gard­ing what to do with the in­come tax wind­fall that will ac­crue to Vir­ginia that was cre­ated by the in­crease in the stan­dard de­duc­tion in the new fed­eral tax law.

The Demo­cratic Party be­lieves that gov­ern­ment knows bet­ter than we scoundrels how to spend what we earn. The party is de­lighted that the fed­eral tax change will re­sult in a back door tax in­crease for many Vir­gini­ans.

Since keep­ing all of that tax in­crease is, for the time be­ing, un­re­al­is­tic, it is will­ing to give up a small part of the wind­fall, pro­vided it is given to peo­ple who pay no state in­come tax and there­fore are likely to have con­trib­uted noth­ing to the wind­fall.

The Repub­li­can Party be­lieves that we an­gels know bet­ter than the gov­ern­ment how to spend what we earn. The GOP wants to elim­i­nate the wind­fall by let­ting those who take the stan­dard de­duc­tion on the fed­eral tax re­turn item­ize their de­duc­tions on the state tax re­turn.

It doesn’t mat­ter that, since the de­duc­tions claimed on the state re­turn would not ap­pear on the fed­eral re­turn, the state De­part­ment of Rev­enue can no longer rely on the In­ter­nal Rev­enue Ser­vice to au­dit the de­duc­tions for the state as well.

After all, an­gels don’t cheat on their taxes.

If the par­ties truly wanted a re­al­is­tic way to off­set a por­tion of the wind­fall to those most likely to have gen­er­ated it, all that they need to do is to re­duce the tax rate ap­plied to each of the state tax brack­ets and/or to raise the up­per lim­its of the brack­ets.

The ef­fect on state tax rev­enues of any pro­posed change to the rates or brack­ets can be es­ti­mated fairly pre­cisely us­ing his­tor­i­cal tax data. Ge­orge Goun­ley New­port News

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