Virginia Democrats have introduced a significant tax reform plan that aims to raise the state’s income tax rates, potentially positioning Virginia as having the highest tax burden in the United States. The proposed legislation would elevate the top effective income tax rate to an unprecedented 13.8%, surpassing even the current rates in California.
Under the new proposal, which was revealed soon after the Democrats consolidated control in Richmond, the top income tax rate would increase from 5.75% to 10%. Additionally, if a companion bill passes, an extra 3.8% would be added. Supporters of the plan argue it is necessary to ensure fairness, with Delegate Kelly Convirs-Fowler asserting that wealthier individuals should contribute their “fair share.” The Democratic leadership claims that the anticipated revenue could exceed $1 billion annually, benefiting sectors such as education, housing, and various government programs.
Critics, however, express skepticism about the proposed tax changes. Governor Abigail Spanberger, who previously campaigned on a platform advocating affordability, now faces backlash from both Republicans and conservative groups. They argue that the tax increases contradict her promises to lower costs in healthcare, housing, and energy. State House Minority Leader Terry Kilgore condemned the legislation as part of a series of “bad bills” and echoed concerns that Virginia might follow the troubled fiscal paths of states like California and New York.
The Congressional Leadership Fund also criticized the rapid introduction of these tax reforms, stating that within 48 hours of taking control, Democrats moved to create additional sales and retail taxes. Their warning is clear: families and businesses could bear the burden of these fiscal changes.
With a solid majority of 64-36 in the House of Delegates and a narrow 21-19 lead in the Senate, the proposed bills are likely to advance through the legislature. This potential shift in Virginia’s tax environment has raised concerns about its implications for business attractiveness and overall economic health, with many critics branding it a move towards a tax-heavy agenda.
As the 2026 midterm elections approach, the ramifications of these new tax proposals could significantly influence voter sentiment. Residents who were promised affordability may find themselves facing higher taxes instead, complicating the political landscape for Democrats in the Commonwealth.
