West Virginians are like people in any of the other 49 states. They would like to get by with paying less in taxes. This year Gov. Jim Justice and the Legislature are trying to oblige them, but not in the most responsible way.
On Tuesday the House of Delegates passed HB 3300, which phases out the state personal income tax in annual increments of at least $150 million per year. It is a plan drafted in response to Justice’s desire to eliminate the personal income tax entirely. Knowing that is not feasible in one fell swoop, Justice instead wants the Legislature to reduce the income tax by 60% this year. He would make up for part of the lost revenue with increases to other taxes and fees, including the consumer sales tax.
Now HB 3300 goes to the State Senate, which can adopt it, amend it, reject it or ignore it. Among the bills the Senate is considering is SB 600, which basically is Justice’s plan. Perhaps “considering” is too strong a word, as SB 600 was referred to committee but never brought to a floor vote.
Thus the Senate may choose to amend HB 3300 and negotiate any differences it has with the House.
As noted here before, there doesn’t seem to be widespread demand in West Virginia to reduce income taxes or to increase sales taxes to make up for income tax cuts. Exactly who is clamoring for these cuts, and why? What state services do they want to live without?
And that leads to other questions. Would this plan or the governor’s plan really convince people on Wall Street — or in Charlotte, Pittsburgh or Des Moines — to relocate to the Mountain State? Would either provide the means to accelerate the speed at which public service districts can extend water and sewer service to areas that need it? Would either enable the Division of Highways to patch, pave and ditch public roads at a speed greater than that at which they are deteriorating?
In other words, do these plans really satisfy the needs people say they want addressed? So far no one has provided hard evidence they do. In that case, why is the Legislature spending so much time on them?
Many people are more concerned with federal income taxes than state income taxes. At the state and local level, consumer sales taxes and property taxes (real and personal) are of greater concern. Personal property taxes, such as those on vehicles, are of more concern to people deciding whether to live in border counties or across state lines.
If legislators really want to meet voters’ expectations regarding taxes, that is where they should put their attention.