Gov. Youngkin Proposes $1B in Tax Cuts

Governor Glenn Youngkin is proposing amendments to the 2022-24 budget aimed at protecting taxpayers and funding vital initiatives. During his time in office, Youngkin has repeatedly demonstrated his ability to lead by ensuring economic security for Virginia families while funding numerous improvements throughout the state. His plans for the next two years reaffirm this sentiment.

First and foremost, Youngkin wants to cut taxes, proposing $1 billion in relief. He calls for reducing the corporate tax rate from 6% to 5%, introducing a 10% business income tax deduction for small businesses, and increasing the standard income tax deduction for individuals and married couples to $9,000 and $18,000, respectively. After bringing deductions to $8,500 and $17,000 earlier this year, this would be the last step to fulfilling his campaign promise to double them.

Provided general fund revenues match estimates, the governor also proposes cutting the top marginal tax rate from 5.75% to 5.5%. According to assessments from Youngkin’s office, his proposals would save the average family of four $578 a year. Youngkin will pay for the cuts using the state’s projected revenue of $3.6 billion while utilizing about $2.6 billion for spending.

The governor not only unveiled plans to reduce tax burdens across Virginia, but also discussed his plans to support education, manufacturing, the environment, and behavioral health. Youngkin suggests adding over $400 million in funding for, among other things, teacher bonuses and reading and math specialists to assist students who fell behind during the pandemic.

Additionally, Youngkin wants to address behavioral health issues in the state by providing $230 million for related services. “Our jails, emergency rooms, and hospitals are filled with people in mental health or substance use crises. Law enforcement is overwhelmed. Our teachers are burned out. Our healthcare heroes are at their wit’s end. Parents and families feel lost and alone, and too many Virginians are afraid,” Youngkin said.

After signing roughly $4 billion in tax cuts just this year, the governor plans to continue his efforts, maintaining that the state can viably reduce taxes further despite inflation, increased interest rates, and a possible recession. Governor Youngkin’s agenda, however, will be subjected to consideration from a divided General Assembly when they convene in January. Virginia Senate Democrats could reject a billion dollars in tax relief in favor of new spending.