Virginia Set to Become Highest-Taxed State
Something big is happening in Virginia. And fast.
Democrats just took control. Lawmakers are already pushing several bills that would raise taxes, in ways that would hit high earners—and could ripple wider.
One headline put it bluntly: “Virginia State Tax Rate Could Rise From 5.75% to 13.8%, Highest In The Nation”. That’s the math folks are talking about if two key proposals both pass.
Here’s what’s on the table. HB 979 would change the income tax brackets. It would add new top rates for the wealthy. The bill text says exactly: “establishes two new tax brackets beginning on and after January 1, 2027, that tax income in excess of $600,000 but not in excess of $1,000,000 at a rate of eight percent and income in excess of $1,000,000 at a rate of 10 percent.”
There’s also HB 378. It would impose a 3.8% net investment income tax on individuals, trusts, and estates beginning in 2027. If that and HB 979 both happen, critics say the combined top tax bite could reach roughly 13.8%—outranking California’s current top rate.
And lawmakers aren’t stopping at income taxes. A batch of other measures would raise revenue in different ways. Proposed bills would let localities hike sales taxes in transportation districts, slap a tax on every retail delivery in Northern Virginia, extend sales taxes to services like landscaping and dry cleaning, and even impose an 11% tax on firearms and ammunition sales.
Put together, these moves would make Virginia stand out from its neighbors. North Carolina’s top rate sits near 3.99%. West Virginia is around 4.82%. Tennessee has no state income tax. Virginia could pivot from being a competitive state in a low-tax region to becoming the outlier.
Supporters say the revenue will pay for priorities like transportation, education, and services. Opponents call it a tax squeeze that will drive people and businesses away. Both sides use big words like fairness and investment. The practical question for voters is simple: will these taxes make life more affordable or more expensive?
Voters handed unified control to one party. Now they’ll watch the bills move fast through committees and floors. Elections have consequences. So do the choices lawmakers make once they have power.
If you care about taxes and the economy in Virginia, start paying attention. These bills will affect take-home pay, job decisions, and where companies decide to locate. This is not theoretical. It’s policy—and it will have a price tag.