STATE INCOME TAX CAN EXCEED FEDERAL

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, February 1, 1992                   TAG: 9202030155
SECTION: EDITORIAL                    PAGE: A-11   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Short
STATE INCOME TAX CAN EXCEED FEDERAL
I'D LIKE TO point out an inequity you did not mention in your editorials on the Virginia income tax.
You figured that the Virginia tax is about one-fifth the federal tax on the same income, which is generally true. But did you realize that large families can end up paying more state income tax than federal tax? The culprit is the unrealistically low $800 personal exemption in Virginia.
Consider a young couple with six dependents (eight exemptions) with only one wage-earner, making $24,000. Assume no other income, credits or adjustments. For 1991 they will have a federal taxable income of $1,100 and a federal tax of $167.
This same family will have Virginia taxable income of $12,600 and a whopping Virginia tax of $501 - exactly three times their federal tax. One more exemption would wipe out the federal tax entirely, but they would still have a Virginia tax of $461.
It is absurd to think that $800 is an adequate exemption for one person's support. Virginia personal exemptions should be closer to the federal level. Higher exemptions could be offset by higher rates at the upper end of the income scale. CORNELIA W. SMITH Smith Tax Service NARROWS

by Bhavesh Jinadra by CNB