Virginia’s system of sales taxes hits everyone with the same percentage on items they purchase. But it has a heavier burden for people with low incomes.
Virginia’s sales tax has a disproportionate burden on blacks and Hispanics, groups that tend to be on the lower end of the income spectrum. That’s according to numbers compiled by the Commonwealth Institute, where Chris Wodicka is a policy analyst. He says the responsibility to pay for roads and schools and libraries is not shared equally.
“When taxes that go to pay for those investments fall harder on families being paid lower wages, the investments aren’t doing all they can to boost opportunity to boost all of our communities.”
Jarad Walczak at the Tax Foundation says one reason for this is that Virginia’s sales tax system was designed to capture the kind of transitions that happened in the 1950s.
“If you are subscribing to some sort of online service. If you are getting accounting or tax prep services or landscaping, most of these things tend to be outside of the sales tax base, including in Virginia.”
One potential solution to the disproportionate burden — a solution that the Commonwealth Institute and the Tax Foundation agree on — is targeted tax cuts to low-income Virginians -- people who didn’t get much of a break from the federal tax cuts enacted last year.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
