Three Republicans Running for Virginia Governor Offer Dueling Tax Plans

Three Republicans Running for Virginia Governor Offer Dueling Tax Plans

Cut taxes or raise taxes? GOP primary debate offers an unusual array of options.


Ed Gillespie. Age: 55. Experience: Chairman of the Republican National Committee and counselor to the President in the George W. Bush administration. Bachelor’s Degree: The Catholic University of America. Place of birth: Mount Holly Township, New Jersey. Profession: lobbyist


Frank Wagner. Age: 61. Bachelor’s Degree: U.S. Naval Academy. Military service: nine years in U.S. Navy. Place of birth: Ruislip, England. Profession: businessman


Corey Stewart. Age: 48. Currently: Chairman of the Board of Supervisors, Prince William County. Bachelor’s Degree: Georgetown University’s School of Foreign Service. Juris Doctorate: William Mitchell College of Law. Profession: attorney

Top Gillespie Donors

• $1.5 million from Let’s Grow Virginia, a Henrico-based PAC, funded in part by Hilton Worldwide and Carly Fiorina’s super PAC

• $100,000 from Dwight Schar, a McLean-based homebuilder with NVR Homes

• $50,000 from Florida-based private prison company GEO Group, which operates Lawrenceville Correctional Center, Virginia's only private prison

• $50,000 from Edward St. John of the Maryland-based commercial real-estate agency St. John Properties Inc.

• $40,000 from Richard DeVos of the Michigan-based investment management firm Windquest Group (husband of Education Secretary Betsy DeVos)

Top Wagner Donors

• $205,000 from Wagner’s Senate campaign committee, funded in part by the Virginia Senate Republican Caucus and the Republican Party of Virginia

• $23,000 from William Magann of the Portsmouth-based concrete contractor W.F. Magann Corp

• $10,000 from Stephen Ballard of the Virginia Beach-based general contractor S.B. Ballard Inc

• $10,000 from Kenneth Allen Hall of the Virginia Beach-based Hall Pontiac GMC

• $10,000 from Virginia Beach-based commercial real estate firm Pembroke Enterprises

Top Stewart Donors

• $429,000 from Stewart’s Prince William County committee, funded in part by the Republican Party of Virginia and the Republican Party of Prince William County

• $35,000 from Christopher Ekstrom of the Texas-based private equity firm Ekstrom Properties LLC

• $30,000 from Manassas-based information technology company Progeny Systems Corp

• $20,500 from Charles Robbins of the Newington-based home health care company CR Associates

• $10,000 from Ahmet Aksoylu, an Oakton-based Realtor with Aksoylu Properties

You know that old saying that nothing is certain in life but death and taxes? Here in Virginia, there’s another certainty: Every year is an election year.

This year features a primary fight between three Republicans running for governor, each with his own separate and distinct tax plan.

“Well this is really more of a conversation than Republicans usually have about taxes,” said Stephen Farnsworth is a professor at the University of Mary Washington. "You have a candidate willing to increase taxes, a candidate willing to abolish the income tax and then, I guess, the Goldilocks plan, which is in the middle.”

The Goldilocks in this campaign is former Republican National Committee Chairman Ed Gillespie. Back in March, he outlined a proposal that would lower the state income tax rate on people who make more than $17,000 a year from 5.75 percent to 5.15 percent. For someone making more than $60,000 a year, that would mean about $400 less in taxes a year. Gillespie’s proposal relies on revenue growth rather than spending cuts to pay for the tax cuts.

“Our rates were set in 1972,” said Gillespie during the one and only debate of the primary season. "They have not come down in 45 years, and other states around us have been moving.”

The idea is classically Republican: cut taxes and predict that will turbo charge the economy, creating jobs in the process. It’s the kind of trickle-down economics that fueled the rise of President Ronald Reagan back in the 1980s. Gillespie is selling the tax cut plan as a clean break from the last four years of Democratic leadership in the Executive Mansion, a move to the center right for a state that’s sharply divided.

“It would also result in hard-working Virginians who have had stagnant wages but rising costs over the past three, four, five years when our economy has been stagnant having nearly $1,300 more in our pockets to spend as we see fit.”

ONE IDEA that’s not classically Republican is raising taxes. But that’s what state Sen. Frank Wagner (R-7) wants to do with the gas tax. He’s proposing a plan that would raise the gas tax in an effort to raise money for building roads while avoiding high-cost tolls that have become prevalent in Northern Virginia and Hampton Roads.

“I can’t remember a Republican candidate for statewide office in Virginia running on a tax increase,” said Quentin Kidd, a political science professor at Christopher Newport University. “And there probably aren’t a dozen nationally in the last decade or two decades who have run on a tax increase like Frank Wagner is right now.”

Meanwhile, Wagner is suspicious of Gillespie’s tax proposal. Specifically he’s critical of how it’s been sold. For example, Gillespie’s plan would save $1,300 a year for families that make more than $100,000 a year. But that’s well under the median household income in Virginia, which is $65,000. On the campaign trail, Wagner has attacked Gillespie’s plan as an irresponsible giveaway to the rich — one that isn’t rooted in experience in government.

“Let me tell you something,” Wagner said during the debate. "It’s easy to say that when you’re sitting here and you’ve never been in state government.”

To solve the problem, Wagner is proposing raising the gas tax to pay for buildings roads. The proposal echoes an earlier era in Virginia politics, when Gov. Harry Byrd suggested using the gas tax as a way to finance building roads while avoiding debt. In Wagner’s plan, raising the gas tax would avoid higher tolls on roads in Northern Virginia and Hampton Roads. Plus the proposal is built on a sliding scale, which would mean the tax would actually decrease when gas prices rise.

“We have an $18 billion deficit in the Virginia Retirement System. We have a Rainy Day Fund for a recession that should be at $2.4 billion. It’s down to less than $300 million right now.”

REPUBLICANS USUALLY run on cutting taxes. And although Gillespie has a moderate plan for cutting taxes, another candidate in the race has an extreme proposal, one that some Republicans are calling unworkable. Prince William County Board of Supervisors Chairman Corey Stewart wants to eliminate the income tax.

“Virginia hasn’t had a significant surplus in revenues, unanticipated unaccounted for revenues, in 10 years,” said Stewart during the televised debate. "Ed’s plan is completely dependent on that. It hasn’t happened. It’s a charade.”

Stewart's solution? Ask state departments to identify how they would slash their budgets 30 percent, and then use those cuts as a menu to reduce spending.

“My tax plan is dependent on a cut in spending,” he said. "We are going to reduce the rate from 5.75 percent to 4.75 percent in a single year.”

Within a decade, Stewart says, the income tax would be eliminated altogether.

“That’s wishful thinking,” said Republican strategist Dan Scandling. "That’s not going to happen because what are you going to replace it with? Are you going to do something on property taxes and push it all onto the localities? I don’t think that’s going to go over very well.”