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Youngkin Has a Promising Tax Plan – Will He Be Able Run on It?

There’s a lot to like about Glenn Youngkin’s recently released tax plans. Norm Leahy [1] and Bob Holsworth [2] cover off on the nuts and bolts of it.

Leahy emphasizes the repeal on the grocery tax, one of the most regressive taxes in existence given that poorer Virginians spend more of their monthly budget on food.

As Leahy notes:

Virginia is one of a handful of states that taxes groceries, a policy the Center for Budget and Policy Priorities says has an “especially harmful impact on income and racial inequities since low-income families tend to spend a larger share of their income on groceries.”

Holsworth emphasizes the play to suburban voters, where support for Republicans have slowly eroded [3] before facing a full-on exodus under Trump:

Like the No Car Tax, Youngkin’s proposal would have its largest impact on the most affluent suburban/urban communities where appraisals have significantly increased in recent years and where local governments have kept the tax rate relatively stable, resulting in increased property taxes for homeowners. And these localities are, of course, the very places where it is imperative for the GOP to reduce the Democratic advantage in recent elections.

This area is clearly a strength for Youngkin. It ties in perfectly with his background as a successful businessman, and it showcases clear policy proposals that modern campaigns are increasingly reticent to put time into. That strength was on display at the recent Virginia FREE leadership luncheon [4]:

In his remarks, which were significantly longer than McAuliffe’s, Youngkin cited his plan to provide tax rebates to Virginians, to double the standard exemption on state income tax returns and to require localities to submit property tax increases to voters for approval, among other tax cuts. He said the local property tax will be a backdoor way for government to increase the tax burden on Virginia families, with real estate values rising rapidly.

And he said the state’s $2.6 billion surplus is evidence of overtaxation.

“Virginia ran a $2.6 billion surplus last year in the middle of a pandemic because the the liberal leadership in Richmond overtaxed everybody,” Youngkin said. “That’s Virginia’s money, not Terry McAuliffe’s.”

It’s a good line, and a better point, and one that Democrats don’t have a good rebuttal against, and therefore don’t try. It’s notable that, speaking in front of the Virginia business community, McAuliffe’s comments were short and focused on the Texas Abortion law.

That’s actually a welcome change from McAuliffe’s primary strategy, which is repeatedly telling bald-faced lies about “inheriting” a budget deficit from his predecessor [5]. A lie that even the Washington Post has taken McAuliffe to task for, yet is still prominently featured on McAuliffe’s website.

In short, Youngkin’s tax plan is a clear strength, and a clear weakness for McAuliffe; and it’s a plan that appeals to both suburban voters and benefits low-income voters.

(It’s also not a “Keynesian” tax plan, as my colleague D.J. McGuire referred to it [6]. D.J. focuses solely on one-time tax rebate due to the surplus and the personal exemption changes, but neither of these make the plan “Keynesian” by any stretch, and his analysis ignores the most impactful parts of Youngkin’s plan.)

On a personal note, it’s also refreshing to see a Republican candidate for office embrace policies, and understand that governing is about making decisions, not about fighting culture wars. I don’t envy Youngkin’s challenge of running a serious campaign for Governor while having to stoke the various absurd fetishes of Trump’s base, like using government to bully transgendered students, pretending CRT is being taught in schools, and playing footsies with Trump’s lies about 2020 being stolen.

There’s only one question facing Youngkin: what will he make his campaign about?

It’s a sad reality that, as we get closer to Election Day, voters are bombarded with information (and misinformation), which makes focusing in on one message the only option to try and break through. In 2017, Ed Gillespie spent the entire year talking to Virginians of all stripes and put together an admirably detailed and thoughtful policy agenda, only to make his final message centered on gang violence, a xenophobic and ill-fitting suit for Gillespie to wear that blew up in his face.

Youngkin is signaling that he is prepared to make “tough on crime” his signature campaign issue the last two months. This would be a mistake, on several fronts – we’ll explore the actual policies later – but from an electoral angle, it undercuts any gains he hopes to make with suburban voters with his tax plan.

Youngkin is the underdog, and knows he needs to go negative and tar McAuliffe with something. Cherry-picked statistics like the ones Youngkin keeps repeating [7] do really well in a message-testing poll. On its surface, it checks every box: it’s red meat for the base, attacks your opponent, makes a nominal play for swing suburban and female voters, and bonus points for trying to tie McAuliffe to the objectively bad and unpopular “defund the police” movement.

The lurking danger is underneath the surface-level messaging opportunities, though, is doubling-down on the message of fear and the ethos of state violence against outgroups. That ethos is precisely why it’s red meat for the base; and why it will poison Youngkin’s efforts to appeal to wayward suburban voters, the same way Gillespie’s did in 2017.

Youngkin shows tremendous potential with his tax plan – as a policy-minded executive and as a Traditional Republican – but will the politics of the high-wire act of running as a Republican in a blue state allow him to actually run on it? That’s up to him.