Press Release from Ed Gillespie for Governor:
RICHMOND, VA – Longtime conservative leader, 2014 U.S. Senate nominee, and 2017 Republican candidate for governor Ed Gillespie released his “Cutting Taxes for ALL Virginians” Plan on Thursday, the first in series of major policy rollouts throughout the campaign.
Gillespie’s plan calls for a ten percent across-the-board cut in Virginia’s individual income tax rates, the first income tax rate cut since rates were established in 1972.
Once enacted, the plan will put nearly $1,300 more back into the pocket of a family of four and create more than 50,000 new full-time private-sector jobs. The full plan can be found here.
“Virginia families are feeling the squeeze, our approach to economic development is antiquated and tired, and Virginia is losing ground to other states. We’ve got to turn things around,” said Gillespie. “The ‘Cutting Taxes for ALL Virginians’ Plan is the centerpiece of a sweeping, substantive agenda we will lay out this year to turn our economy around by emphasizing natural, organic economic growth instead of a top-down government approach that picks winners and losers with our taxpayer dollars.
This plan cuts individual income taxes by ten percent across-the-board for the first time since the rates were established in 1972. The plan means nearly $1,300 more in the pocket of a family of four, would diversify our economy by helping start-ups and scale-ups, and create more than 50,000 new full-time private-sector jobs.”
“Ed Gillespie is advancing a desirable, thoughtful, and responsible tax reform plan that will make Virginia more competitive, foster private-sector job creation, and allow all tax paying small business owners, individuals, and families to keep more of the money they have earned,” said Former Governor and U.S. Senator George F. Allen, who serves as Gillespie’s Honorary Policy Co-Chair. “Ed Gillespie's plan will ultimately save a typical family household nearly $1,300. That's truly meaningful tax relief for all taxpayers and will lead to a more vibrant Virginia economy.”
“Republicans in the General Assembly have worked hard in recent years to put Virginia on fiscally-sound footing and lay the groundwork for exactly the kind of tax cut that Ed Gillespie is laying out,” said Speaker-designee M. Kirk Cox (R-Colonial Heights).
“This responsible plan demonstrates Ed’s deep understanding of our economy and the state budget. The plan cuts taxes for all Virginians, creates long-term private-sector job growth, and responsibly protects Virginia’s existing commitments to core services. It’s smart, balanced, and exactly what we need.”
Senator Mark Obenshain (R-Rockingham) said, “Ed Gillespie's bold plan for an across-the-board tax cut demonstrates his commitment to governing through conservative principles. A tax cut like this will make a meaningful difference to hard working Virginia families. It also sends a loud and clear message that Ed Gillespie is serious about restoring Virginia’s position as the best state in the country to do business.”
Speaking about the local business tax reform section of the plan Fairfax Supervisor Pat Herrity said, “Ed’s plan recognizes the difficult choices that localities have been forced to make while trying to build innovative local economies with a decades-old tax structure.
He’s serious about partnering with local leaders to find a path that allows us to eliminate job-killing taxes in a fiscally-responsible way. This is the first local business tax plan I’ve seen from a statewide candidate that can actually work.”
Cutting Taxes For ALL Virginians Plan
The Plan in 30 Seconds
Provides the FIRST income tax rate cut since rates were established in 1972
Cuts individual income tax rates by ten percent across-the-board, putting nearly $1,300 per year back into the pocket of a family of four
Sparks natural, organic economic growth to diversify our economy and create more than 50,000 new full-time private-sector jobs in five years
Puts Virginia on a path toward meaningful local business tax reform
Phased-in over three years and fully funded within existing revenue growth to ensure core government services are protected, preserving $2 billion in projected revenue growth for spending over five years
Cut Individual Income Tax Rates Across the Board
The “Cutting Taxes for ALL Virginians” Plan cuts taxes for all Virginians in a responsible way that protects the Commonwealth’s investments in the core functions of government.
Cut individual income taxes by ten percent across-the-board over a three year period.
Fully fund the tax cut through existing revenue growth by using revenue triggers to protect critical investments in education, health care, transportation, public safety, and other core services.
Further offset revenue reductions by eliminating special interest tax preferences, cutting wasteful spending, and conducting a full review of economic development programs.
Accelerate Local Tax Reform
Cutting state income taxes is only part of the equation. To truly spark economic growth, Virginia needs to reform its antiquated, patchwork system of local business taxes. The Business and Professional Occupancy License or BPOL Tax, the Machinery & Tools Tax, and the Merchant’s Capital Tax are vestiges of a prior era when Virginia’s economy was growing by leaps and bounds despite these impediments to business growth.
Local governments, through no fault of their own, have come to rely on these job-killing, growth-stunting taxes. We need to work together to replace them with pro-growth alternatives. The plan puts Virginia on a path toward meaningful local tax reform by creating an action-forcing component that empowers localities to replace these anti-growth taxes with revenue options that are less detrimental to growth.
Sunset the BPOL, M&T, and Merchant’s Capital taxes within a three year period.
Empower localities to affirmatively choose to re-enact pre-existing business taxes or to utilize alternative revenue streams from a menu of options that will be collaboratively developed. The menu of options will be developed by working with all stakeholders, but will not include a local income tax.
Localities will not be permitted to “double dip” between pre-existing local business taxes and alternative revenue options. Any tax changes will be required to be revenue-neutral.
Form the Commission on State-Local Funding and Service to foster a partnership between state and local governments to find alternative revenue options that are more business-friendly and conducive to economic growth.
The Commission will fully consider the balance between state and local government in funding and service delivery across the Commonwealth. The Commission will be advised by the Mayors and Chairs Advisory Group appointed within the first 100 days of the administration.
Establish a Technical Assistance Lab at the Department of Taxation to support local tax reform.
Cutting taxes and reforming Virginia’s antiquated tax code will not be easy. We have to overcome special interests and decades of entrenched thinking. As governor, Ed Gillespie will responsibly execute this plan by working with the General Assembly in an open and transparent manner.
Convene a Special Session of the General Assembly to cut taxes in September of 2018.
Designate a cabinet-level senior advisor to the governor to execute the “Cutting Taxes for ALL Virginians” Plan.
Convene and solicit citizen input from families and businesses throughout the Commonwealth.
Form a Taxpayer Paperwork Reduction Working Group to streamline the filing process and provide better technical assistance to taxpayers.
Task the Department of Taxation to increase transparency about the costs and usage of tax credits, exemptions, and special preferences.
Require the Department of Planning and Budget to publish simple, comprehensible reports on state spending trends and the use of taxpayer dollars.
This is a sensible and fiscally-responsible plan that is phased-in over three years and fully funded through existing revenue growth by using revenue triggers. Modeling conducted by the Thomas Jefferson Institute and economists that built its tax model at the Beacon Hill Institute shows that under the plan Virginia can keep its existing commitments to education, health care, transportation, public safety, and other core services.
Virginia’s General Fund is expected to grow by $3.4 billion over the next five years.
Under this plan $1.3 billion, or approximately 40 percent, of currently-projected growth would be provided for tax relief.
This plan would still allow for more than $2 billion in new investment in education, health care, transportation, public safety, and other core services.
The Economic Impact
Ed’s plan to cut taxes for all Virginians will put more money in your pocket and help small businesses create jobs. Modeling conducted by the Thomas Jefferson Institute and economists that built its tax model at the Beacon Hill Institute shows what this needed plan will do.
Lead to $1,285 in additional disposable income for a household of four when fully phased in.
Lead to more than 53,6049 new full-time private-sector jobs - an expected 25 percent increase over current job growth projections.
Lead to $304 million in new economic investment and activity.
Help attract and keep people here in the Commonwealth, especially talented workers, retirees and veterans, by making Virginia more attractive and competitive.