Does Virginia's Tax Code Disproportionately Hurt Low-Income People?

Oct 8, 2019

Wealthy people are taxed more in Virginia. But, people at the other end of the spectrum may be feeling more of the pinch.

Is Virginia’s tax code upside down? Does it hit people at the bottom end of the economic scale hardest, claiming a larger share of their income?

Chris Wodicka at the Commonwealth Institute says the system disproportionately hits some groups more than others.

“So even though we are pretty far into this economic expansion, a lot of Latinx workers in Virginia actually saw their wages go down over the last decade or so after you adjust for inflation,” Wodicka says.

Jared Walczak at the Tax Foundation acknowledges some end up disproportionately hit, although he adds the system is not designed to target specific groups. 

“There’s nothing in the tax code, obviously, that distinguishes or discriminates against minorities on the basis of their race," he explains. "But it’s fair to say that to the extent that a population is more likely to be low income that a regressive tax code would adversely impact them.”

The Commonwealth Institute and the Tax Foundation both say an earned-income tax credit could be one option for Virginia to reduce the burden on low-income families.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.