Richmond, Virginia—Today, the House Finance Committee voted to pass HB472, sponsored by Delegate McNamara. The bill would double the amount of the standard deduction for state taxes, resulting in a loss of nearly $1 billion in funding for our kids’ schools, the roads we drive on, and the services we rely on. Members of the committee chose to pass this legislation, which would mainly impact middle- and high-income families, rather than passing HB1312, which would strengthen the Earned Income Tax Credit and directly benefit low-income families and help them make ends meet.
“It’s disappointing that lawmakers chose to pass HB472, blowing a large hole in the state budget, a bill that would line their own pockets rather than providing much-needed economic relief to low-income families. This bill would result in a sharp cut in funding for critical services our community relies upon,” LaTwyla Mathias, Executive Director at Progress Virginia, said. “We all want to live in thriving communities, with access to world-class schools, a robust social safety net, and well-maintained roads. That starts with tax policy that ensures millionaires and billionaires pay their fair share and low- and middle-income families aren’t left to pick up the slack.”
“Doubling the standard deduction is not a targeted approach that helps those hardest hit by the COVID-19 pandemic. Instead, it leaves a nearly $1B hole in the budget moving forward, which could instead go to our schools, our health care, and more. Lawmakers still have an opportunity to help low-income people make ends meet by preserving funding to strengthen the Earned Income Tax Credit in the introduced budget so that we have a more equitable recovery,” Rodrigo Soto, Revenue Campaign Manager at The Commonwealth Institute for Fiscal Analysis said.
Doubling the standard deduction would exclude nearly 80% of taxpayers with incomes below $24,000, according to a report released by The Commonwealth Institute for Fiscal Analysis.
Data from The Commonwealth Institute for Fiscal Analysis shows how many families would benefit from making the Earned Income Tax Credit fully refundable.