Gov. Jim Justice’s proposed legislation to eliminate the personal income tax in West Virginia cannot find a friend – for myriad reasons – on either side of the political aisle or out here in the real world among business types in suits and overalls. His proposal, at least for the moment, seems dead on arrival.
We see Big Jim’s big idea as nothing new and nothing more than an audacious shifting of the tax burden in this state from wealthy people like the governor himself to those who are already struggling to find coins in the cushions to put dinner on the table.
When Justice drew the curtains back on his proposal to make broad and profound changes to the state’s tax code, he also had to show us that he was hiking a number of other taxes including a bump to the sales tax that would push it to 7.9 percent, the highest of any state in the nation.
But, more importantly, the tax policies that the governor is proposing would be to ask more from working families and the working poor via regressive taxing schemes to enable the state to lessen the tax burden on the rich.
Personal income tax revenues account for about $2.1 billion of the state’s tax base, a little less than half of the General Fund that pays for government services across the board.
According to the governor’s plan, personal income tax reductions will total $1.036 billion – initially – and minuscule rebates to low-income people will total $52 million. To make up the nearly $1 billion difference? Other tax hikes.
So, Justrice is proposing to raise taxes on soft drinks and tobacco, beer and wine. And, for the first time, the state would be taxing some professional services, according to the Justice plan, including law offices, accountants, gyms and more. The governor also wants a “luxury tax” on some items – including clothing, electronic equipment, appliances, boats, ATVs and snowmobiles and more – costing somewhere north of $5,000.
If you think, like the governor, that the cost associated with those new taxes – on services or sales items – will not be passed along to consumers? Your thinking, like this plan, is flawed.
Finally, Justice wants a sliding scale for severance taxes for coal, oil and natural gas, paying more when markets are better. If, of course, that day ever arrives.
If not, coal barons, like Justice, would pay less.
Again, in case anyone had forgotten, Gov. Jim Justice is the richest person in the state.
In short, the governor’s tax proposal is half-baked, at best. Most troubling is that the governor would introduce a series of new taxes only to provide relief to the state’s most wealthy via the elimintation of the state’s income tax.
At this stage of Justice’s tenure in the governor’s office, this looks like little more than Big Jim greasing the skids of the state’s tax code to benefit himself.