Virginia Tax Collections Up 9.7%; Virginia GDP Stagnant At 0.0%

snoopyGreat day if you’re a bureaucrat, from the RTD:

Virginia’s revenue collections rose 9.7 percent in September over the same month a year ago, outpacing state forecasts by 2.5 percent over the first three months of the fiscal year.

Estimated payments of non-withholding income taxes — reflecting gains on stock sales and collections from professionals who don’t withhold taxes from their paychecks — rose 23.8 percent over the same month a year ago.

Payroll withholding taxes increased 11.9 percent and collections of recordation taxes — levied on wills, deeds, lawsuits and contracts — rose by 11.7 percent in September.

Non withholding income taxes are up a staggering 23.8%?

How many of you guys got a 10% pay increase last year?  What… you neither?

But alas, in the eyes of the Democrats, when government is doing better we are all doing better… as for the 0.0% GDP bit and the Virginia economy flatlining under McAuliffe?  Could potentially have something to do with the mixed messages the Governor’s Office sends the business community — particularly as it pertains to the Mountain Valley Pipeline (among other projects).

Meanwhile, so long as Virginia’s excise men are doing their job, who cares about a stagnant economy?  Richmond is doing just fine… oh, and did we mention McAuliffe is contemplating a series of stiff tax increases rather than reform as his parting gift in the Governor’s Budget next year?

Work harder, tax serfs.  Thousands upon thousands of government bureaucrats are depending on you.

  • Jerel C. Wilmore

    “Non withholding income taxes are up a staggering 23.8%?

    How many of you guys got a 10% pay increase last year? What… you neither?”

    Non-withholding income taxes are typically paid by self-employed people Mr. Kinney; these are folks who do not receive W-2s from an employer. To the extent that the climate for small, self-employed business people has improved, these folks have gotten “raises,” as their businesses improve and they have more income.

    You might know that if you were a CPA, had a masters of taxation, or had a masters of law degree in taxation.

    • …and of course, if one were a high school graduate of English, we’d understand the word “staggering” does not imply a negative connotation.

      Appreciate the defense though. Where there’s smoke, there’s a tax hike?

      • Jerel C. Wilmore

        Are you willfully misunderstanding this data or do you really not understand?

        Income taxes are collected as a percentage of income. If there is no income, there is no income tax. If there is more income, more income tax is collected.

        The data being reported by the state indicates that more income is being earned by self-employed and/or contractors (which I think you’ll agree is a good thing) and as a result, the state is collecting more income tax.

        Let’s say that you earn $30,000 in year 1 and $75,000 in year 2. If the current tax law stays the same from year to year, you would expect to pay more income taxes in year 2 than year 1 because you earned more income in year 2. No one “hiked” your taxes, you simply earned more income and therefore owe more income tax.

        Virginia is collecting more tax because people, and people within the non-withholding classification in particular, are earning more.

        • Quick quiz: what is GDP right now in Virginia?

          • Jerel C. Wilmore

            GDP is not the same as taxable income.

          • DJRippert

            Mr Wilmore is a capable accountant but a less than capable economist. He’s possibly right about the increase in taxes. However, the implication of his comments is, essentially, the rich get richer and the poor get poorer. As more money is earned by those in higher tax brackets – taxes go up. However, this can be a less than zero sum game if the gains of the wealthy come at the expense of the middle class and poor. Virginia’s tax rates are effectively flat – with one exception – capital gains are not taxed at a lower rate than ordinary income. Hence, no increase in state GDP can still be accompanied by a rise in tax revenues.

            Absent a tax hike, gains in tax collection with a corresponding flat line in GDP means that income in equality is increasing.

            Congratulations Democrats – you are achieving in Virginia what has been achieved in DC – incredible income inequality.

            Here are the US cities with the greatest inequality, How many are run by liberals?

            http://www.fastcoexist.com/3050320/solving-inequality/the-10-us-cities-with-the-biggest-gap-between-rich-and-poor#5

          • Jerel C. Wilmore

            Mr. Wilmore is not an accountant; he is a tax attorney.

            You write: “Absent a tax hike, gains in tax collection with a corresponding flat line in GDP means that income in equality is increasing.”

            That simply is not so, and shows up three things that are common in the comment section of this blog: 1) an almost total ignorance as to how income taxes function; 2) a willingness to simply make things up; and 3) a desire to change the subject when called out about 1 and 2.

            Gains in tax collection while GDP remains flat can be explained in many ways. Indeed, tax collections can go up even as GDP declines. Consider the following hypothetical:

            Two businessmen, Able and Baker, form a corporation to design and manufacture high tech equipment. In the early years of their business what income they have is offset by startup expenses and development expenses. The company’s output is part of GDP, but the company has little or no taxable income. After a number of years and successful development of several products, the company is about to become very profitable. At this point, Able sells his stock to Baker and recognizes a large taxable gain. Baker, on the other hand, does not sell his stock and does not yet have a taxable event. Unfortunately for Baker, the economy undergoes a downturn in the next few years. The national GDP declines, but the corporation is still making a modest profit. After a couple of years Baker decides to retire and sells his stock for a profit even though the economy overall is in a downturn.

            What is the point of this example? Simply this: income taxation does not precisely track the economy because economic events are not the same as taxable dispositions. Tax collections can actually go up just before a downturn as people sell out and take their profits. Tax collections can go down as GDP expands as investors invest in long term projects that increase productivity without being immediately profitable.

          • Jerel C. Wilmore

            “Here are the US cities with the greatest inequality, How many are run by liberals?”
            Everyone knows that unemployed and underemployed people concentrate in urban areas. Urban areas offer a greater level of services to the poor and have mass transit options for those who can no longer afford their own vehicles. Urban areas don’t have large numbers of poor because they are governed by liberals. Urban areas have large numbers of poor people because urban areas always attract large numbers of poor people.

          • Bert Nye

            The information on the link was interesting. The final conclusion is that the inequality between rich and poor, a favorite Democrat talking point, is being “corrected” in these Democrat run cities by finally making the cost of living so high poor people are forced to move away. High unemployment rates were “corrected” mostly by removing people from the workforce against which the statistics are measured. In both cases the people who can’t afford to live there and the people not even looking for a job weren’t helped, but the statistics were used by Democrats in charge to claim progress.

  • Connie S.

    Dang it, Democrats never meet a tax they don’t love. Meanwhile we Virginians are Taxed Enough Already!! #TEA

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