Add the West Virginia Chamber of Commerce to the chorus of concerns about the details of Gov. Jim Justice’s tax plan.
Chamber leaders say the organization generally supports the idea of an income tax cut — but has concerns about the sales tax increases that the governor has proposed to offset that.
“To rob Peter to pay Paul is not the best solution,” Chamber President Steve Roberts said today on MetroNews’ “Talkline.”
Rather than cutting the income tax by 60 percent right away — with the governor talking about elimination within three years — Roberts advocated for a more incremental approach.
“The proposal that we eliminate 60 percent in one swoop, that’s a big chunk to eliminate in one swoop,” Roberts said.
The Chamber expressed its support for an income tax cut — but its reservations about the other taxes going up under the governor’s plan — in a six-page outline.
The Chamber’s concerns come on top of those expressed by the broad-based Business & Industry Council. The West Virginia Farm Bureau, which says it represents about 17,000 farming families in the state, has also expressed doubt about the details of the plan.
The governor is proposing a 60 percent cut in the state personal income tax, suggesting it will be a splash that will encourage population growth. He would like to eliminate the tax entirely within three years or so, banking on that growth.
The income tax accounts for about $2.1 billion of the state’s tax base, about 43 percent of the General Fund to pay for government services like education and healthcare.
An outline of the governor’s plan estimates initial personal income tax reductions totaling $1,035,650,000 and rebates totaling $52 million for lower-income residents — but also tax increases of $902,600,000 to make up for most of those breaks.
The proposal would also raise a variety of other taxes, including on soft drinks, tobacco, beer and wine. And Justice proposes taxing some professional services for the first time, including law offices, accountants, gyms and more. He also advocates a “luxury tax” on some items costing more than $5,000. And he proposes sliding scales for severance taxes for coal, oil and natural gas, paying more when markets are better.
Justice refers to the additional taxes as pulling the rope. And he has not acted excited about a slower phase-out.
“You’re going to see an orchestrated effort by those out there that are probably thinking penny-wise and pound poor,” Justice said near the beginning of a Thursday night town hall event. “They’re good people. But they’re thinking selfishly to tell you the truth.”
The governor made another plea today that population growth will actually bring more business activity to the state.
Then he blasted the Chamber of Commerce.
“If you think you can buy into the shallowness of the Chamber of Commerce — just think about where the Chamber of Commerce has led West Virginia over the last 50 years,” he said.
“They’ve led us to dead last, dead last, dead last.”
The business groups have objected that the governor’s proposal would balance the income tax through the increased income tax and expanded taxes on professional services, but without providing benefit to key categories of the business community.
Income tax filers that wouldn’t get a break under the governor’s plan include:
- Schedule C Business Profits;
- Schedule E Rents, Royalties and Pass-through Entity Profits;
- Schedule D Capital Gains; and
- Schedule F Farm Income.
Mike Clowser, chairman of the West Virginia Business & Industry Council, today said that group’s concerns remain.
“Yes, we would like to see the income tax eliminated, certainly reduced,” Clowser said, “and we would like to see how this would affect businesses across the state as well.”
He applauded the governor for starting the conversation about the income tax and said the organization would examine alternatives.
Under any plan, he said, the questions are “How does business fit into that? How does business operate going forward?”
— MetroNews (@WVMetroNews) March 15, 2021