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Posted at 2:01 PM ET, 07/ 8/2010

Income tax burden shifts to Virginia’s wealthy

By Paige Winfield Cunningham

If you earn more than $100,000 and you live in Virginia, you’re likely paying more income taxes then you did 12 years ago.

Three-figure earners grew by 7 percentage points from 1998 to 2007. But the percentage of taxes they paid grew by 17 points.

Those at the lower rungs of the income ladder saw a smaller shift in the opposite direction. Earners below $50,000 shrunk by 10 percentage points, but their contribution to the tax burden decreased by 11 points. And due to the 2004 and 2007 tax reforms, married couples could earn up to $23,300–instead of just $8,000–before they had to pay taxes.

But I must also point out that, due to sales and use taxes, lower-income earners are still paying a smaller percentage of their income in taxes than higher-income earners: 6.9 percent compared to 8.8 percent, at least according to the Institute on Taxation and Economic Policy.

Still, it’s the clear the if the tax burden has expanded anywhere, it’s been onto the backs of the rich, not the poor. It’s the trend of the decade–not just in Virginia, but in lots of other states as well.

Continue reading this post by Paige Winfield Cunningham at Old Dominion Watchdog here.

Paige Winfield Cunningham is an investigative reporter and managing editor at Old Dominion Watchdog . The Local Blog Network is a group of bloggers from around the D.C. region who have agreed to make regular contributions to All Opinions Are Local.

By Paige Winfield Cunningham  | July 8, 2010; 2:01 PM ET
Categories:  HotTopic, Local blog network, Va. Politics, Virginia, taxes  
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Comments

You are confusing the tax burden with what percentage of their income people pay in taxes.
” Still, it’s the clear the if the tax burden has expanded anywhere, it’s been onto the backs of the rich, not the poor. It’s the trend of the decade–not just in Virginia, but in lots of other states as well.”
This “onto the backs of the rich” indicates that somehow the rich give a greater percentage of their money to taxes now than a decade ago, or that they somehow make less than they did a decade ago.
You are not taking into account how much richer the rich are (the increase in wages of those in the top quartile has increased far more than the bottom quartile) than they were. If we gave the rich a 25% raise, and the poor no raise, but kept the tax rates the same, the rich would all of a sudden have a greater tax “burden” because they would pay a larger percentage of the total tax revenue. But this is far from burdensome. If you look at the salary data, I think you will find that to be the case.
Furthermore, you say the three figure earners grew by 7 percentage points. What you don’t say (which you say in the linked article) is that this is nearly a doubling of the number of 6 figure earners. You follow that with “the percentage of taxes they paid grew by 17 points.” Does this mean that their tax _rate_ grew by 17 points, or the percentage of total taxes collected (“tax burden”) grew by 17 points?

Implying that taxes are somehow more burdensome on the rich, merely because their wages have increased astronomically while the rest of our wages have stagnated, to me seems irresponsible.

If you are going to continue reporting on this, please try to keep the tax burden and the tax rate more clearly separate. A higher tax burden does not necessarily mean that you pay more of your income in taxes, it could mean that your income has risen while others has not. This happens to be the case, nationwide, as well as in Virginia.

See the third graph down:
http://www.virginiaatwork.org/Data/WagesIncome/tabid/132/Default.aspx

Posted by: formerDCPSstudent | July 9, 2010 12:40 PM | Report abuse

Excellent and important insight from formerDCPSstudent, which will be lost almost immediately without more specific and clear examples.

Posted by: jody43jody | July 11, 2010 7:25 AM | Report abuse

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