Virginia has one of the lowest state and local tax burdens in the nation, according to new data released by a research firm in conjunction with the end of the federal tax filing season.
Gov. Tim Kaine trumpeted the ranking — which put the state in ninth place for the lowest amount of taxes — as pro-business, saying the state’s tax policies help attract new and expanding companies.
The report “reinforces that fact that Virginia is one of the nation’s best-managed states, with a diverse and growing economy and a low tax burden,” Kaine said.
The Tax Foundation, a D.C.-based nonpartisan tax research firm, publishes the annual ranking of all 50 states. The ranking is based on the average amount of state and local taxes each resident pays.
A second report published by the foundation ranked Virginia 19th and Maryland 22nd for best business tax climate. That report is a truer measure of a state’s business-friendliness because it measures taxes both companies and individuals are subject to, said Bill Ahern, a spokesman for The Tax Foundation.
“We think of residential, income and property as personal taxes,” he said. But if those are high, “businesses will have a hard time getting the right workers. It isn’t good enough to tally up all the checks that businesses write, but to examine the overall tax climate.”
Tax Freedom Day
» The Tax Foundation publishes an annual “Tax Freedom Day” calendar, which measures days worked against total taxes owed.
» Tax Freedom Day is April 26 this year, meaning the average American had to work 116 days; or that 31.6 percent of their earnings went to local, state and federal taxes.
» In Virginia, Tax Freedom Day is April 24, or 114 days and 31.1 percent of earnings.
» In Maryland, Tax Freedom Day is April 27, or 117 days and 32 percent of earnings.
» In the District, Tax Freedom Day is May 9, or 129 days and 35.1 percent of earnings.
