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Va. candidate vows to cut grocery prices. Should farmers be concerned?

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In an era where politicians have numerous hot-button and divisive topics to lean on, the 2021 Virginia gubernatorial race is pressing an issue that isn’t often discussed publicly on the campaign trail: the price of food at the grocery store.

In television ads, Republican Glenn Youngkin says that he wants to eliminate the state sales tax on food items in grocery stores. While walking through a grocery store in the ad spot, Youngkin explains, “It’s not your imagination. Consumers prices are going up.” The ad shows prices on items such as milk and produce changing ever higher right in front of you.

Virginia is one of barely a dozen states in the U.S. that have a sales tax on grocery store food — a tax policy that disproportionately impacts lower-income families who tend to make more meals at home as opposed to eating out at a restaurant. Virginia’s grocery tax is 2.5 percent, putting it on the low end of the 13 states that still tax food items — other states, such as Idaho, Kansas, and Mississippi, are all above 6 percent — but still, a tax nonetheless. (By comparison, Virginia’s normal sales tax on consumer products is 6 percent.)

Youngkin’s proposal is not new in recent years of politics (even his main challenger, Democrat Terry McAuliffe supports repealing the tax), but Youngkin is making this a central issue to his campaign unlike any statewide candidate in recent memory.

While food producers (both farmers and ranchers) already get a relatively meager share of the food dollar — just over 14 cents, according to the most recent data — it seems expected that farmers will wonder if further slashing prices would impact their income, or whether another player along the food chain, such as processors or distributors, would be impacted.

The simple answer is no.

“It would not reduce one penny of the share going to the store, the wholesaler, or the original producers. It would reduce the tax being collected and remitted to the state and local governments,” explained Stephen Haner, a senior fellow at the Thomas Jefferson Institute.

In rural parts of Virginia, especially through central and southwestern Virginia, signs declaring “Farmers for Youngkin” are commonplace, and it seems unlikely that the GOP candidate would do anything to jeopardize the support from the agricultural industry.

Repealing the grocery store sales tax (formally, bringing it to 0 percent) would put Virginia in line with most of the rest of the nation. Haner told radio station WVTF that eliminating the tax would likely cost the state about $500 million a year. But that shortfall would come from government projects and not directly from the pockets of farmers who produce or sell goods in the state.

McAuliffe, Youngkin’s challenger, has stated that while he supports doing away with this tax, there needs to be a way to replenish that funding so that things such as schools and roads don’t take a hit. Youngkin has pledged, specifically, that K-12 education would not be negatively impacted by his policy proposals.

Beyond the grocery tax, Youngkin is targeting other tax policies, such as suspending an increase to the state’s gas tax, doubling standard deductions on tax filings, and eyeing tax-season rebates for those filing jointly.

Youngkin’s campaign did not respond to a request to discuss his food policy more deeply prior to the publication of this article, but his press team responded later in the day. The campaign didn’t reply to any of the direct questions AGDAILY had asked, including whether farmers would be affected by this tax cut. Instead, they said more generically that the plan is to “make Virginia a more affordable place to live, farm, work, and raise a family.”

 

Update: 8:44 a.m. ET 10/6/21: This article was updated with the response from Youngkin’s campaign.

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