More members of the House Republican supermajority are expressing serious doubts about the governor’s big tax proposal.
“He’s raised the topic to the level of let’s talk about it,” Delegate Brandon Steele, R-Raleigh, said today on “Radio Roundtable” on WJLS Radio.
But Steele has concluded, “This is a tax shift, not a tax reduction.”
Gov. Jim Justice has made a big push to cut West Virginia’s personal income tax by 60 percent, while making up most of tax base with a variety of increases.
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.
Business groups in recent days have raised concerns that the governor’s proposal specifically exempts “Schedule C” businesses — and other businesses essentially classified as sole proprietors — from the income tax cut.
Steele said he had a town hall event with community businesses this past Saturday, lasting about two hours. “I didn’t find a single person that could support really any aspect of that plan.”
Other delegates have come out against the plan as it has been presented.
Delegate Joshua Higginbotham, R-Putnam, said on social media that he is against it.
I am coming out in strong opposition to @WVGovernor Jim Justice’s massive tax increase proposal. He wants to raise your taxes to 7.9% which would be the highest sales tax in America. I will be an opponent of his bad idea.
— Joshua Higginbotham (@Higginbotham4WV) March 13, 2021
Another delegate, Austin Haynes, R-Fayette, wrote on social media that he is against the proposal too.
House Finance Chairman Eric Householder, R-Berkeley, last week said the committee would be more likely to take up a completely different bill with a more moderate approach than the governor’s proposal.
The past couple of years, the House has considered bills to establish a “personal income tax reduction fund” and reduce tax rates the fund reaches a set threshold. Last year, the House passed the bill, but it wasn’t taken up in the Senate. Concerns arose over what the longer-term financial effects would be for the state.
Governor Justice has described wanting to make a big splash with an income tax cut, saying “nothing has more sex appeal.” He has talked about wanting to quickly lower rates so the state could market itself to people enticed by the rate and ready to move here.
Steele, in today’s Beckley radio interview, indicated a more incremental approach interests him. He said the business owners he met with in his community pushed for lawmakers to come up with their own plan.
“I think you’ll see come out of, at least, the House of Delegates will be a plan that will not fundamentally disrupt our economy, but at the same time push us in a direction of reduced personal income taxation without the corresponding shift of all these other sales tax-related categories. It’s something more manageable. It takes more time. But there’s no need to do something hastily if it’s going to be damaging.
“So I’m hopeful in the next couple of days we’ll be able to come out with that.”
Today is Day 37 of the 60-day regular legislative session.
Governor Justice, who has had a series of town hall events to promote the tax plan, has not had one in a week.
During a public appearance on Wednesday, Senate President Craig Blair, R-Berkeley, said the Legislature is still driving ahead with the income tax proposal.
“Don’t think for a minute that it’s going to slow down the work that we’re doing for the people of West Virginia,” Blair said at a press conference. He added, “We’re going to keep moving forward as if we’ve already won.”