The Legal Aid Justice Center supports HB378 because increasing revenue is essential if the state is to fully fund public schools as well as strengthen other systems that serve Virginians. The state's current revenue sources are a major constraint on the General Assembly's ability to make necessary investments to support students and families. While the GA has made laudable progress on K-12 funding in recent years, it is a long way from investing the billions of additional dollars annually that JLARC's 2023 study showed is needed in order for the state to meet its obligations to students, teachers, and local governments. Moreover, as there is growing recognition of the need to modernize Virginia's K-12 funding formula, to successfully do so without disadvantaging any groups or areas will necessitate a significant boost in appropriations. To get this done, the legislature needs more revenue to work with. Virginia can easily afford to do better for its children. Whether looking at our robust GDP, or the fact that we're a top-12 state in median household income, there is a lot of untapped support available for strengthening our schools. That is why the Education Law Center graded Virginia "D" in funding effort in its 2025 report, because we as a society have the means to do better. Lawmakers often speak of the difficult choices that have to be made in budgeting for education, healthcare, and other priorities. But the needs of Virginians do not have to be in competition with each other if the legislature allows the wealthiest to contribute their fair share. The resources exist within Virginia's economy to advance the common good if lawmakers are willing to harness them.

My name is Jessica Mott, from Arlington VA and I am commenting on behalf of myself as an individual, and also as a representative of the Virginia Grassroots Coalition, and of We of Action Virginia. We urge that you support HB378, on Net Investment Income Tax. We believe that very wealthy people with passive income from investments rather than work should pay their fair share. As you know, the proposed bill would protect small business owners, most home sellers, and anyone with under $500,000 of income. HB378 creates a net investment income tax of 3.78% which is the same as the federal rate, but with a higher exclusion rate of $500,000. It can help Virginia offset Trump's HR bill, which cuts services to pay for tax handouts for the rich. The Commonwealth Institute has estimated that the expected revenue from HB378 is about $650 million a year. We need additional sources of revenue to this year's budget to help address the significant cuts and expensive regulatory requirements at the federal level, so that we ensure funds and access for all to health, food security, education, and childcare in the upcoming state budget. Thank you for taking our views into consideration.

Oppose. Taxing the rich because they are rich is discriminatory. Why do people believe that somehow if my neighbor is wealthy, that somehow that translates into “less for me”? My neighbors finances do not impact my ability to create my own wealth, savings or take anything away from me. We are all stewards of our finances. I do not begrudge anyone their financial situation. It is also not anyone’s right to unfairly require any American to pay more for any goods or services (or taxes) disproportionally. That is what charity is for. And what charity is not taxed. There should be incentives for creating wealth and not penalties.

Virginia thrives when we invest sufficient resources into our communities and neighbors. As part of investing in Virginia, we need a fairer and more equitable tax code. I strongly support a net investment tax on ultra-wealth estates. This type of parasitic wealth accumulation should be addressed, and estates that earn this much money should be required to pay a portion to support our society and Commonwealth.

Taxing the rich seems to be the montra for Dems and when it's been done in other state the rich leave and move to lower tax states. Due to high taxes and high living costs in Virginia some people are already moving from Virginia to West Virginia and states south of Virginia like North Carolina, Tennessee, and Florida. That exodus could grow into a flood if taxes in Virginia go up this will hurt our economy, making it much more expensive to live in Virginia.

I oppose HB378. Once my income passes the threshold that causes this tax to kick in, I will be moving to a different state with less government overreach and taking my high income job and property with me.

I oppose HB378. It would impose an additional state-level tax on net investment income, further increasing the tax burden on Virginians who save, invest, and plan responsibly for the future. At a time when inflation, rising housing costs, and economic uncertainty are already straining household finances, layering new taxes on investment income sends the wrong message to working families, retirees, and small business owners. Investment income is not limited to the ultra-wealthy. It includes dividends, interest, and capital gains relied upon by retirees, middle-class families building long-term savings, and entrepreneurs who reinvest earnings into new ventures. Trusts and estates—often used for family planning, disability care, or intergenerational stability—would be disproportionately affected, as they frequently reach tax thresholds more quickly. HB378 risks penalizing prudence and discouraging long-term financial responsibility. Virginia has historically benefited from a reputation as a stable, predictable, and business-friendly Commonwealth. Imposing a new net investment income tax undermines that reputation and risks driving investment capital, high-skilled individuals, and small businesses to states with more favorable tax climates. Rather than expanding the tax base through economic growth, HB378 threatens to shrink it by discouraging investment and capital formation. The General Assembly should prioritize affordability, economic competitiveness, and responsible budgeting over new taxes that target savings and investment. Virginians deserve policies that reward hard work and long-term planning—not ones that treat financial responsibility as a revenue source.

Neighboring states don't have a "net investment tax," so this bill would discriminate against investors and incentivize them to leave the state and not come to the state (shrinking the tax base), as the Tax Foundation has suggested. My earlier comment about the bill was confusing, because it referenced tax rates in North Carolina, Kentucky, and West Virginia, which DON'T have net investment taxes. Those rates I mentioned in my earlier comment are those states' general income tax rates, NOT investment tax rates. Virginia's current top tax rate is 5.75% -- by contrast, the top tax rate is lower in North Carolina (3.99%), Kentucky (3.5%), and West Virginia (4.82%). But this bill would increase Virginia's top marginal tax rate to 9.55% (the 5.75% income tax rate, plus the 3.8% net investment tax). Neighboring states like North Carolina, Kentucky, West Virginia, etc., don't have any net investment tax. Tennessee has no state income tax at all. This bill would put Virginia at a disadvantage in attracting investors.

This bill would drive investors out of Virginia (and productive people with investment income), shrinking the tax base. When Maryland raised taxes on millionaires in 2007, many moved out of state, resulting in Maryland raising less revenue as a result (even though that tax rate increase was not as big as this bill). As the Tax Foundation explained then: "The Comptroller of Maryland has reported that the number of 'millionaire' returns tumbled sharply between 2007 and 2008, a 30% drop in filers and 22% drop in declared income. Rather than income taxes from this group rising by $106 million, they fell by $257 million….One-in-eight millionaires who filed a Maryland tax return in 2007 filed no return in 2008….A Bank of America Merrill Lynch analysis of federal tax return data on people who migrated from one state to another found that Maryland lost $1 billion of its net tax base in 2008 by residents moving to other states." Investors can move across the border to neighboring states where there is no state income tax, like Tennessee, or neighboring states where tax rates are lower, like North Carolina (3.99%), Kentucky (3.5%), and West Virginia (4.82%). If they are retirees, they can move to Florida, which has no state income tax. So this bill would very well cost the state money. It will definitely shrink the economy by driving some investors and productive people out of the state.