As the governor and two chambers of the Legislature push for differing big tax plans, citizen groups are weighing in on them.
State community organizations plan a community rally and press conference at 11 a.m. Friday on the north side outside the Capitol to call on legislators to say no to House Bill 3300 and any cuts to state personal income taxes.
“Every version of HB3300 would slash state revenues resulting in less funding for programs that families count on. Families are struggling. Programs that serve families have long wait lists, and this bill will make that worse,” said Jim McKay, state coordinator of Prevent Child Abuse WV.
“We should be investing more in effective programs that strengthen families and serve children — not less.”
A little more than a week before the end of the regular legislative session, Gov. Jim Justice and Republican majorities in the House and the Senate all agree they want to cut the personal income tax. But there are big differences on how to do it.
Justice’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.
A plan currently under consideration in the Senate would cut the personal income tax initially by $1.09 billion and would offset that cut with a variety of tax increases anticipated to be $890 million. It would not include rebates for low earners, and it would raise the sales tax to 8.5 percent and reinstitute a food tax.
A House plan would cut at least $150 million a year in income taxes, projecting elimination in about a dozen years. The plan does not include offsetting taxes, and the concern is whether natural economic growth could keep pace with the cuts.
Americans for Prosperity-West Virginia, a libertarian-leaning organization, issued a statement today praising the governor, Senate and House for considering an income tax cut — but taking no sides in which approach is best. The organization did say any plan should be simple, fair and not increase tax burden overall.
The organization also urged lawmakers to make government cuts to match revenue cuts, “eliminate exceptions and carveouts on consumer sales taxes,” and plan realistic “triggers” to phase out the personal income tax while phasing in changes to sales taxes.
“Fortunately, West Virginia has the opportunity to make meaningful, comprehensive tax reforms that will address many of
the shortcomings in our current tax code that keep our state’s individuals, families and businesses from truly thriving,” wrote AFP-WV.
Jared Walczak, vice president of state projects at the national Tax Foundation, said West Virginia is embracing an opportunity by considering an income tax cut.
“West Virginia policymakers understand there is both an opportunity and a need,” Walczak said today on MetroNews’ “Talkline.”
“It’s a wonderful state, but there’s been something lacking on the competitive front. And especially in an era where remote work seems more possible than ever, there really does seem to be this idea that in the mid-Atlantic, West Virginia could be a destination state for remote workers, for drawing people across the state line, and that lower income taxes could be an important part of that.”
He acknowledged, “I think lawmakers want to latch onto that, but of course the question always comes down to the tradeoffs.”
.@JaredWalczak joins @HoppyKercheval to discuss the different proposed tax plans in West Virginia, including Governor Justice and the Senate's plan. WATCH: https://t.co/yCFQ3nDJuy pic.twitter.com/SYWNBfy8zH
— MetroNews (@WVMetroNews) April 1, 2021
The groups gathering at the Capitol on Friday contend the tradeoffs are out of kilter.
“We cannot ask families to pay more to cover the cost of tax cuts for the wealthiest West Virginians,” said Kelly Allen, executive director of the West Virginia Center on Budget and Policy.
“The personal income tax is our only progressive tax, the only one that asks people with the ability to pay slightly more to do so. It balances out our regressive sales tax, which falls much more heavily on low- and middle-income households. By moving towards a heavier reliance on the sales tax and away from the income tax, we make our overall tax system less fair, less moral.”
Rev. Jeff Allen, director of the West Virginia Council of Churches, spoke in terms of fairness for average citizens.
“Pope Francis reminds us that one of the first questions in the Bible that God asks is ‘Where is your brother?’ and today we might add ‘Where is your sister?’ These are questions that we all should ask with any major public policy change and one that appears to have been neglected with regards to these tax proposals.”