When the General Assembly goes into session in January, members will have to balance the books on the next budget. And advocates say a new tax should be considered.
Tax the rich. That's the idea behind the wealth proceeds tax, which would hit things like dividends, interest and capital gains. A new report from the Institute on Taxation and Economic Policy says a three percent wealth proceeds tax in Virginia would generate about a billion dollars of new revenue.
"Most public opinion polls show that people have a pretty good consensus on taxing wealthy people and wanting to see wealthy people pay more in taxes rather than less," says Sarah Austin, a senior analyst at the institute. "And the wealth proceeds tax is a really well-designed tax to make sure that we are only targeting people with high amounts of wealth."
Raising taxes on proceeds from wealth would hit high-income people while other options like raising the sales tax would disproportionately harm low-income people, says Rodrigo Soto at the Commonwealth Institute.
"Virginia's top state income tax rate has a millionaire and a teacher at the same top state income tax rate, and there's something inherently unfair about that," Soto says. "So, what we're asking is for the ultra-wealthy to finally pay their fair share here in Virginia."
Minnesota created a one percent wealth income tax two years ago, and so supporters say Virginia can use that example when a new General Assembly gavels into session with a new governor next year.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
