About a decade ago, Virginia abandoned the estate tax. Now, some are hoping Democrats bring it back.
Rich people in Virginia pay the lowest share of their income in taxes, according to the Commonwealth Institute. That’s an imbalance they say puts a larger burden on low-income people.
Chris Wodicka is a policy analyst at the institute, and he says the solution is a new estate tax that would capture revenue from real estate, security, business interests…
“So right now, a lot of capital gains that are held by large estates never go taxed because of how our tax system is set up currently,” Wodicka says.
Jared Walczak at the Tax Foundation says most states have been moving in the other direction, getting rid of estate taxes because of the competitive disadvantage they create.
“When states vary on their estate tax provisions, very high net worth individuals towards the end of their life leave the state and do tax planning around that," explains Walczak. "Which means they’re not paying other taxes for the last years of their lives to that state.”
Now that Democrats are in control of the General Assembly, advocacy groups on both sides of the estate tax debate will be lobbying hard.