Virginia House Bill HB2333

Virginia 2025 Regular Session

• Introduced: 1/8/25
• Refer: 1/8/25

Caption

Income tax, state; establishes a new bracket beginning on and after January 1, 2025.

Impact

The bill's financial implications are significant, as it introduces new mechanisms for revenue distribution. A substantial portion of the revenues collected from the highest income tax bracket (10 percent) is earmarked for critical public services, including a significant allocation for public education, targeted support for child care subsidies, and contributions to the Virginia Housing Trust Fund. This reflects an intent to address state-level needs while equitably redistributing tax revenue to sectors that can benefit from enhanced funding.

Summary

House Bill 2333 proposes amendments to the Code of Virginia with respect to income tax imposition and the allocation of revenue generated therefrom. Specifically, the bill delineates new income tax brackets to be applied for taxable years commencing on and after January 1, 2025. The proposed legislation aims to streamline and modernize the income tax structure, with specific rates established for different income levels, including a tiered rate that reaches up to 10 percent for incomes exceeding $1 million.

Contention

Despite its broad goals, HB2333 is not without contention. Some stakeholders, particularly from business sectors, may argue that increasing tax rates, especially for higher income brackets, could have adverse effects on economic growth and deter investment in the state. Conversely, proponents advocate that increased support for education and social services is vital for fostering long-term economic development and enhancing the quality of life for Virginia residents. The dialogue surrounding this bill highlights the balancing act between generating needed public revenue and promoting a favorable economic environment.