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July 25 — There are “a good amount of parallels” between Hillary Clinton's tax proposals and her running mate Sen. Tim Kaine's (D-Va.) record on the topic as governor, a tax researcher told Bloomberg BNA.
Clinton picked Kaine, who was governor of Virginia from 2006 to 2010, as her running mate July 22.
During his time as governor, Kaine opted for targeted proposals instead of sweeping changes—a method in line with Clinton's proposals thus far, Richard Auxier, a research associate at the Urban-Brookings Tax Policy Center, said in a July 22 interview.
“Kaine did advocate for a couple of tax increases, but similar to Clinton it wasn’t broad reform of the tax code,” Auxier said. “It was in his case advocating for money to pay for transportation projects.”
Clinton's tax plan would increase revenue by $498 billion over the next decade and includes several policies to raise taxes on individual and business income, according to analysis from the Tax Foundation, a nonpartisan group.
Kaine also shouldn't be labeled as “a single-note tax-hiking governor,” Auxier said.
Kaine in 2006 reached a deal with the Virginia legislature to abolish the state's estate tax, a move that was effective as of July 1, 2007. The tax had brought in about $140 million in revenue each year. In the competition for small businesses and retirees, the levy made it hard for Virginia to compete with states with no estate tax, like Florida, the Wall Street Journal reported at the time.
While Kaine did advocate for certain increases, he also instituted sales tax holidays, which were popular among voters, and a homestead exemption that was basically a property tax cut, Auxier said.
Kaine was also comfortable compromising and making adjustments to work with a Republican legislature, a trait that is needed if he faces resistance in Congress, Auxier said.
“You see in Tim Kaine someone with governing experience, and his term reflects that what you put forward isn't always what you get,” he said.
Kaine in 2009 proposed replacing a car tax with an income tax increase, an idea that was roundly rejected by Republican lawmakers, the Washington Post reported. The income tax would have increased by 1 percentage point for those earning more than $17,000, the Post reported.
The car tax, which dates back to the colonial era and was originally applied to horses, cost the state $950 million a year in reimbursements, Kaine said at the time. The tax swap would bring in $1.9 billion annually, he said.
The proposal would have benefited low- and middle-income residents, who regardless of their income were paying a car tax. On the other hand, higher-income residents would bear the brunt of a higher income tax, Auxier said.
On the corporate side, Kaine as a U.S. senator called for closing loopholes that let companies hold income in tax havens, according to a letter he sent to the Senate Finance Committee in 2013. In the letter, Kaine said Congress should reexamine the rates on income like carried interest, which is “equivalent to salary but taxed at dramatically lower rates.” He said Congress should also reconsider the treatment of capital gains.
“My preference on individual tax reform and how to tackle the expenditure side is to avoid pitched battles about each particular expenditure in favor of an aggregate approach,” Kaine said in the letter.
Kaine, along with several other Democratic senators, co-sponsored legislation in July to increase tax credits for carbon capture systems (135 DTR G-8, 7/14/16).
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