RICHMOND, VA – A new proposal before the Virginia General Assembly would create a higher income tax rate for the state’s wealthiest earners, directing millions in additional revenue toward education, childcare, and affordable housing programs.
House Bill 188, introduced by Delegate Kelly Convirs-Fowler and referred to the Committee on Finance, would amend Virginia’s income tax structure for the first time in decades. Under the measure, taxpayers with annual incomes over $1 million would see a new top marginal rate of 10 percent, up from the current maximum of 5.75 percent.
For all other brackets, the state’s long-standing tax rates — two percent on the first $3,000, three percent up to $5,000, and five percent up to $17,000 — would remain unchanged. Income between $17,000 and $1 million would continue to be taxed at 5.75 percent.
A new section, §58.1-320.1, outlines how the additional funds would be used. According to the bill, 50 percent of the new tax revenue would go toward basic aid for public schools, 30 percent would support the Child Care Subsidy Program, and 20 percent would be allocated to the Virginia Housing Trust Fund. Lawmakers included language to ensure these funds supplement, rather than replace, existing state spending.
Supporters of the proposal argue it would create a fairer tax structure and direct wealth-based revenue toward underfunded community needs. Opponents are expected to raise concerns about potential impacts on business competitiveness and high-income taxpayers leaving the state.
The measure arrives amid growing debate in Richmond over education funding and housing affordability, both of which have become key policy priorities in recent sessions.
Key Points: Virginia bill would add 10 percent tax on millionaires to fund schools, childcare, and housing – Richmond
- House Bill 188 proposes a new 10% income tax rate for Virginians earning over $1 million
- Half of the new revenue would fund public schools, with the rest supporting childcare and housing programs
- The bill marks the first major restructuring of Virginia’s income tax rates in more than three decades
