Here’s a not so fun fact:
The income of a public school teacher in Virginia is currently taxed at the same rate as the income of millionaire business executives.
Currently, Virginia’s highest income tax rate of 5.75% applies to anyone making more than $17,001—so most Virginia taxpayers. That means the income of the average teacher in Virginia making $70,441 in 2024 is taxed at the same rate as the income of, say, Robert Blue, the CEO of Dominion whose base salary was $1.2 million last year.
Doesn’t seem fair does it? Especially since Virginia’s finances are facing threats on multiple fronts with President Donald Trump’s massive cuts to Medicaid and Supplemental Nutrition Assistance Funding (SNAP) on the horizon.
Enter a new analysis from The Commonwealth Institute of Fiscal Analysis (TCI), a nonpartisan Virginia research and advocacy organization, that proposes several ideas for how lawmakers could raise more tax revenue to address the expected shortfalls while also making the state’s tax code more fair.
I caught up this morning with the report’s lead author, Megan Davis, a senior policy analyst at TCI who broke down some of the ways lawmakers can address the “upside down structure of our tax code.”
Among the ideas included in TCI’s report is the creation of a 10% tax on income over $1 million that would raise an estimated $1.4 billion in fiscal year 2027.
“We know the money is out there because we’ve been giving it away,” Davis said in reference to Trump’s massive tax cuts for the wealthy. “The wealthy are getting wealthier, and we know the funds exist.”