Debate developing in General Assembly over proposed tax cut
RICHMOND, VA (WWBT) - Virginia stands to gain $500 million in extra revenue due to federal tax cuts, and a debate is brewing in the Capitol over how to use it.
Gov. Ralph Northam said last week he wants to use half that money to make the state's Earned Income Tax Credit refundable to help low income taxpayers. For example, someone who owes the state $800 but qualifies for a $1,000 credit would actually receive $200 from the state.
But Republican House Speaker Kirk Cox favors a broader tax relief aimed at the middle class.
"They really dramatically raised the (federal) standard deduction, from $12,700 to $24,000, and our law says if you take the federal standard deduction, which a lot more people are going to do, you take the state," Cox said. "That means for a lot of middle class people, they won't be able to itemize things they're used to - home mortgage, healthcare costs, personal property tax."
Cox would like the General Assembly to allow taxpayers to itemize deductions even with the federal deduction so that middle class families will be able to keep more of their federal tax cuts.
Northam will address a joint meeting of the Senate Finance and House Appropriations committee Friday about the state budget.
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