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Virginia a Textbook Example of Problems With Targeted Tax Credits

Virginia’s failure to report how much it doles out in tax credits to each company through the Major Business Facility Job Tax Credit is dragging down the state’s overall spending transparency score. That isn’t likely to change anytime soon though. Tax credits aren’t spending, per se — even though that tax revenue has to be made up somewhere, either through more taxes or spending cuts. So, while a grant to a company would have to be reported, tax credits become easy political tools for state...

Tennessee Moves to End Tax on Dividend Income

Tennessee legislators this week are considering a bill to phase out the state’s 6 percent tax on dividend and other investment income. Tennessee already has no tax on wages or salaries. The state’s tax on dividend and other income is known as the “Hall Income Tax” after State Senator Frank Hall, who led the fight for it in 1929. Gov. Bill Haslan has publicly opposed the tax cut but more than half the state’s legislators from both sides of the political aisle have signed a pledge to do away with...

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