CHARLESTON, WV (WOWK) – On Inside West Virginia Politics, we hear from Governor Jim Justice and legislators in the discussion surrounding Justice’s proposal to eliminate the state’s income tax. Our guests weigh in on the pros and the cons of the proposal.
WV’s state income tax: Why does the governor want to remove it?
In Segment 1, we take a look at West Virginia Governor Jim Justice’s latest town hall meeting on the state income tax.
The governor’s goal for these virtual town halls is to discuss his proposal to eventually phase out or eliminate the state income tax. He says with the state’s current strong economics, now is the time to move forward with removing the tax. While some taxes may raise slightly to offset the state income tax removal, Justice says his goal is for West Virginians’ net tax burden to go down.
Why the proposal to remove the state income tax concerns some lawmakers
In Segment 2, the discussion on the state income tax continues with Delegate Jim Barach (D-Kanawha). Barach says he is concerned about the proposal to eliminate West Virginia’s state income tax, calling it “a return to supply-side economics.”
Barach says the proposal to backfill the lost revenue from the income tax by raising the state sales tax, among other taxes, because the sales tax is a “regressive tax” and those “on the lower end of the economic spectrum pay a higher amount of their money in the sales tax.” However he says he is in favor of the proposed taxes on tobacco and sugary drinks to help West Virginians cut back on their consumption of those products.
A closer look at the current proposal to remove the state income tax
In Segment 3, Delegate Jason Barrett (R-Berkeley) stops by to continue the discussion on West Virginia Governor Jim Justice’s proposal to repeal the state income tax. Barrett says while he does think removing the tax would help working West Virginians, the governor’s plan is a bit “aggressive” and “may be too large of a bite of the apple too quickly.”
He says he believes the finance committees for the House of Delegates and the State Senate can create an economically responsible plan to phase out the income tax. Barrett also tells us he is getting questions and concerns on the current proposal, which would include increasing the state sales tax, from West Virginians who want a better understanding of the proposal.
Barrett also shares his concerns that several counties are not receiving enough vaccine doses, especially in Berkeley, Morgan and Jefferson counties.
What would removing the income tax do to prices in West Virginia?
In Segment 4, Sean O’Leary, with the West Virginia Center on Budget and Policy, says the governor’s proposed plan to eliminate the state’s income tax “is not going to be a winner for West Virginia” as it is now.
He says raising sales taxes will mean West Virginians, especially in low to middle-income households, will be paying more, but will only get the state “halfway there” in making up for the income tax. He says this plan could mean cutting revenue from other areas to make up for the lost tax revenue, an issue he says is seen uniformly across the states that do not have income taxes.