VP Nominee Tim Kaine has Largely Favored Progressive Tax Reform, With Some Deviations


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As the eyes of the U.S. turn to the Democratic National Convention this week, many people will be getting their first look at Hillary Clinton’s recently announced running mate, Sen. Tim Kaine. As one of Virginia’s current senators and the state’s former governor, Tim Kaine has supported progressive tax reform efforts, though he has occasionally taken stances at odds with those efforts—including the repeal of Virginia’s estate tax in 2006.

Kaine’s most recent tax positions appear to be largely in sync with the proposals of the Clinton campaign. Like Clinton, he has favored legislation that would close the carried interest loophole as well as the corporate inversion loophole. Furthermore, Kaine has called for raising roughly one trillion dollars in new revenue over 10 years, which is relatively in line with Clinton’s call for about $1.5 trillion in new revenue.

Most of Kaine’s positions on tax policy as both a member of Congress and governor stand in direct contrast with Trump’s running mate, Indiana Gov. Mike Pence, who has been a longtime advocate of supply-side economics and the tax cuts for the rich associated with that philosophy.

Governor of Virginia

As governor of Virginia, Kaine’s defining tax policy battle was his effort to raise substantial new revenues to put the state’s dwindling transportation funding sources on a more sustainable track. During each of his first three years in office, Kaine proposed raising around a billion dollars per year in transportation funding revenue largely from fees or taxes related to motor vehicles. Ultimately, Kaine’s battle with a notoriously anti-tax legislature resulted in a budget compromise that was not particularly sustainable, depending largely on debt financing and higher traffic fines.

Kaine’s other tax policy moves as governor were more of a mixed bag. Unlike Gov. Mark Warner before him, who wisely vetoed a bill that would have repealed the state’s estate tax, Gov. Kaine enthusiastically signed an estate tax repeal measure in 2006. This decision by Kaine drained valuable revenues from Virginia’s coffers and exacerbated the unfairness of the state’s tax code during a time of growing income inequality. As the Washington Post warned in an editorial leading up to repeal: “scrapping the estate tax — he single most progressive tax levied by government — sends the wrong signal at the wrong time. It sacrifices fairness for the many on the altar of special favors for the few.”

On a more positive note, Kaine did succeed in pushing progressive tax legislation in 2007 that raised the state’s income tax filing threshold substantially and slightly increased the state’s personal exemption. These changes made the state’s tax code somewhat less regressive by providing many low-income individuals with a tax cut.

On his way out of office, Kaine also offered a budget proposal that included a progressive increase in the state’s personal income tax—raising the top tax rate from 5.75 to 6.75 percent—though the idea was never taken seriously by most legislators or by then-incoming Gov. Bob McDonnell.

Senator from Virginia

While Kaine has supported relatively progressive tax policy positions during his time in the Senate, he championed a regressive tax proposal when he first ran for the Senate in 2012. At the time, Kaine proposed that rather than allowing the Bush tax cuts to be repealed for all individuals making over $250,000, they should only be repealed for those making over $500,000. To start, this proposal failed to recognize that allowing the cuts to expire for just those over $250,000 already represented a massive and problematic concession in that it would have meant extending 80 percent of the Bush tax cuts. In addition, the primary beneficiaries of his plan were not those making between $250,000-$500,000, but those making over $500,000. In fact, a CTJ analysis at the time found that 73 percent of the benefit from Kaine’s proposal would have gone to individuals making over $500,000 and 30 percent of the benefit would have gone to those making over one million dollars.

Fortunately, since Kaine was elected to the U.S. Senate, he has taken a distinctly more progressive tack on tax issues. For example, in recent years Kaine has co-sponsored a number of progressive tax proposals, including legislation to expand the earned income tax credit to childless workers, legislation that would curb inversions and legislation to close the carried interest loophole. Perhaps influenced by his time as governor, Kaine has also supported common sense legislation like the Marketplace Fairness Act, which would allow states to collect sales tax more easily from Internet retailers.

The clearest distillation of Kaine’s views on federal tax policy is the 2013 letter he sent to the Senate Finance Committee laying out his general principles on what tax reform should look like. Broadly, the letter calls for Congress to reduce or eliminate tax expenditures as a way to make the tax code simpler, more progressive and economically efficient. In addition, Kaine calls for tax reform to raise about a trillion dollars in revenue over ten years, which he would like to be used as part of a budget deal to reduce the deficit. Kaine also argues that corporate tax reform should raise revenue by closing down offshore corporate loopholes.

While Kaine has not been a leader in the fight for more progressive taxation on the federal level, he has been a consistent supporter of progressive tax legislation.

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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