Taxation
Taxes reflect what citizens and businesses pay for their government. Government activity increases as the scale of economic activity increases, and the relative burden of a dollar in taxes depends on income levels of citizens and businesses.
Why is This Important?
Taxes fund valuable government services that would not generally be provided by the market or that are not appropriate services for the private sector. These government services help facilitate business activity and improve the quality of life of residents. Ultimately, setting local tax rates is a complicated process and involves finding a balance that suits both the needs of an area's citizens and its economy.
How is Hampton Roads Doing?
In
2009, the local per capita
tax rate in the Hampton
Roads region was $1,764.
The Northern region ($1,866)
had the highest local
per capita taxes, while
the Southside ($749)
and the Southwest (787)
had the lowest.
The 2009 tax burden in Hampton Roads -- which is measured as local taxes collected relative to personal income -- was 4.42 percent and close to the state average of 4.08 percent in 2009.
What Influences Taxation?
The level of local taxes paid by an area's residents is determined by a process involving both the state and local governments. Unlike some states, Virginia state government retains significant control over both state and local taxes and has imposed maximum rates on many local taxes. Localities in Virginia can only levy taxes in those areas authorized by the General Assembly. Localities do, however, retain control over many areas of taxation including the property tax rate.
Data Definitions and Sources
Local taxes include general property tax and a variety of other taxes, such as local sales and use taxes, consumer utility taxes, business license taxes, and motor vehicle taxes.
For the purposes of per capita tax calculations, taxes collected are transformed into 2009 dollars, using the CPI rebased to set 2009 as the base year.
Personal Income figures from the BEA Regional Economic Accounts
Local Area Personal Income,
Table CA1-3
Population Estimates from the U.S. Census
Bureau, www.census.gov/population/www/.
Local Taxes from the Commonwealth of Virginia, Auditor
of Public Accounts
See the Data Sources and Updates Calendar for a detailed list of the data resources used for indicator measures on Hampton Roads Performs.
