Virginia Republicans say they have mandate to increase standard deduction
Wealthy people tend to itemize their tax deductions for things like charitable giving or mortgage interest. Most people, though, file a standard deduction.
Senator David Suetterlein is a Republican from Roanoke who wants to double that standard deduction amount. "About 85 percent of all Virginians use the standard deduction instead of itemize," he says. "And by raising the standard deduction, you provide tax relief to Virginians without necessarily picking the winners and losers of the various credit systems that some other folks advocate."
Doubling the standard deduction was a central plank in the platform of Republican candidate for governor Glenn Youngkin. So Republicans feel like they have a mandate to make it happen.
But Chris Wodicka at the Commonwealth Institute says it won't help everybody. "It wouldn't reach a lot of filers with lower incomes because they already are able to use existing deductions and credits so that their state income tax liability is already very low and so then they would not really benefit from this proposal."
Wodicka says the proposal from current Governor Ralph Northam for an earned-income tax credit would help out people who need it the most.
Lawmakers will debate all these proposals when they balance the books during the 2022 General Assembly session, which starts in mid-January.