Virginia's Grocery Tax Becoming Hot Topic in Governor's Race
The campaign for governor is reaching into your grocery cart.
Ever since Virginia created the sales tax back in the late 1960’s, people have been calling for an elimination of the tax on groceries. It hits low-income people the hardest, and it's been a populist message on the campaign trail for Democrats like Henry Howell or Douglas Wilder. Now Republican candidate for governor Glenn Youngkin says it's time to get rid of the grocery tax.
Stephen Haner at the Thomas Jefferson Institute says eliminating the grocery tax would probably cost about $500 million a year.
"From a pure tax policy standpoint, sales tax exemptions complicate the code and a lot of purists don't like the idea," explains Haner. "But at the same time it's very popular politically I think."
Eric Figueroa at the Center on Budget and Policy Priorities says the easiest way to find the revenue to eliminate the grocery tax is to raise the general sales tax rate to make up the difference.
"The quick solution often actually causes more harm," Figueroa says. "The more deliberate way, I think, to do it would be to look at your whole system and say where are there ways you can make this more progressive, either earned-income tax credits to help those at the bottom or higher tax rates for those at the very top."
Youngkin's proposal is part of a broader menu of tax cuts, including suspending an increase to the gas tax and doubling the standard deduction for the income tax. Former Governor Terry McAuliffe says he's also in favor of eliminating the grocery tax. But he says Youngkin's plan to cut taxes without saying how he’ll replace revenue would decimate funding for schools and roads.