By Virginia Bay News

A growing debate inside Richmond is setting off alarm bells for Virginia taxpayers: proposals circulating among progressive lawmakers and advocacy groups would push Virginia’s top income tax rate as high as 13.8%, more than double the current 5.75% and potentially the highest state income tax rate in the nation.

Even if supporters insist this is “only a discussion” or a “long-term structural idea,” Virginians should take the warning seriously. Big tax hikes rarely start as fully formed bills. They start as trial balloons.

From Competitive Commonwealth to Tax Outlier?

Virginia has long marketed itself as a business-friendly, middle-of-the-road state — not a low-tax haven like Florida or Texas, but not a high-tax outlier like California or New York either. That balance has helped attract employers, federal contractors, and families priced out of the Northeast.

A 13.8% income tax would shatter that reputation overnight.

Such a rate would:

• Exceed California’s top marginal rate
• Far surpass neighboring states like North Carolina (4.5%) and Tennessee (0%)
• Place Virginia among the most punitive tax states in America

For a state already struggling with outmigration in Northern Virginia and stagnation in rural regions, the message would be clear: if you earn, you pay — a lot.

The Familiar Promise: “Only the Rich Will Pay”

Supporters frame the idea as a “millionaire’s tax” or a way to make the system more “equitable.” Virginians have heard this story before.

History shows that once rates rise:

• Thresholds creep downward
• Temporary measures become permanent
• Middle-class earners inevitably get caught in the net

Worse, high earners are also the most mobile. They leave. When they do, projected revenue often collapses — forcing lawmakers to chase the remaining taxpayers even harder.

A Spending Problem, Not a Revenue Problem

Virginia is not broke.

The state has enjoyed years of budget surpluses, federal COVID-era aid, and record revenues — yet lawmakers continue to talk about new taxes rather than serious spending reform.

That raises a hard question:
If Virginia can’t balance priorities at 5.75%, why should taxpayers believe 13.8% will be enough?

Education bureaucracy growth, unchecked program expansion, and resistance to performance-based budgeting are never addressed. Instead, the answer is always the same: tax more.

Small Businesses and Professionals Would Take the Hit

Unlike large corporations, most Virginia small businesses file taxes as pass-through entities. That means income taxes hit owners directly.

A top rate near 14% would punish:

• Medical professionals
• Contractors and consultants
• Family-owned businesses
• Farmers and independent operators

These are not hedge fund managers. They are the backbone of Virginia’s economy.

The Bigger Signal

Even if a 13.8% rate never passes this session, the signal alone matters.

It tells investors, employers, and families that Virginia’s political leadership is willing to gamble with competitiveness to satisfy ideological goals. Once that trust is lost, it is hard to win back.

Bottom Line

Virginia doesn’t need to become the next high-tax cautionary tale.

Raising the income tax to 13.8% would:

• Drive out talent and capital
• Hurt small businesses
• Undermine long-term growth
• Punish productivity instead of reforming spending

Taxpayers should be watching Richmond closely. When politicians start floating extreme numbers, it’s rarely accidental — and it’s almost never the end of the story.

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