It's tax time. Have you filed your tax return yet? If you have, you're part of a system that funds most state government functions in Virginia. According to data from the Census Bureau, Virginia relies more on income taxes for its state revenue than almost any other state.
Only Oregon has a higher percentage of state tax revenue that comes from income taxes, and that's because it doesn't have a sales tax. That puts Virginia in second place, with 58 percent of its state tax revenue coming directly from income taxes. Other states that rank high are Massachusetts at 55 percent and California at 52 percent.
"Virginia is among the more progressive states," says Frank Shafroth, director of the Center for State and Local Leadership at George Mason University. "States that depend much more on sales and use taxes tend to impose much greater taxes on low and moderate income persons than higher income persons."
Despite the reliance on income taxes for most of the state revenues, Virginia has one of the lowest tax rates. Luke Juday at the University of Virginia Weldon Cooper Center for Public Service says the commonwealth is able to pull this off for two reasons: the size of its government and the wealth of its citizens.
"We have a relatively low expenditures per capita," says Juday. "Virginia's state government actually has smaller budget than most states of its size."
So that's one reason. The other is wealth. Virginia ranks seventh in per capita income.
"There's a lot of money in Virginia," he says. "And as a result you can have a lower rate but still end up with a lot of cash at the end."
Virginia is one of only six states where more than half of state revenues come from income taxes.