West Virginia Legislation began its 2021 session yesterday with Republican supremacy, meaning proposals that matter to Republicans have an excellent chance of getting into effect.
Legislators have expressed an interest in improving broadband access across the country, reducing the governor’s executive powers and increasing the number of charter schools. The most striking goal, however, is the complete abolition of state income tax, as has happened in seven states and partially in two other states. Even Mississippi is considering this move.
The government’s abolition of income tax is attractive, as businesses, industries, and wealthy people often go to states without such a tax. But the devil is in the details. It is important to consider the pros and cons of what it would take to get rid of this tax here.
According to an article by Lacie Pierson in the newspaper, several financial decisions are needed to achieve the abolition of income tax, which is estimated to raise an estimated $ 2.1 billion in the treasury. Here are some interesting ways that lawmakers could make up for the deficit created by removing this tax.
Sales tax of 8% or more and new sales taxes on previously untaxed items, including hair care, professional and contract services, are possible. Associated with this is the reintroduction of the food tax of 2.5% to 3%; This was gradually eliminated years ago because it was so regressive.
Some of the most worrying proposals include cuts in funding for higher education and plans to “cut all government funding for WVU and Marshall.” “Really?” Add to this the “elimination or reduction of Promise Scholarships,” which are reportedly largely funded by the West Virginia Lottery. If the goal is to bring thriving businesses and more affluent people here, college funding waiver will not be charged. The longstanding statewide penny soft drink tax for the medical school at WVU could be transferred to the general fund.
Other legislative proposals to compensate for losses from ongoing tax collections are “temporarily higher income tax for high earners pending the final elimination of taxes”, “budget cuts for the public, higher education and the Ministry of Health and Human Resources by 5% to 10%” and a “Graduated settlement tax on coal and gas”, which quickly increases metallurgical coal taxes.
Perhaps the most interesting proposal is the legalization and taxation of marijuana. It took forever to get medical marijuana approved here. Currently, 100 new medical marijuana licenses have been approved nationwide. Six are in Huntington and two in Barboursville. Good gracious. That’s more local locations than McDonald’s.
There is no mention that property taxes in some states with no income tax, including Florida, New Hampshire, and Texas, are at least twice that of West Virginia.
The 2021 session of the West Virginia legislature should be fascinating as it takes into account the pros and cons of abolishing the state’s income tax. We all want to keep our hard-earned dollars, but few want the state’s infrastructure to be destroyed with the stroke of a pen. Legislation needs rational planning and a scalpel rather than a sledgehammer.
Diane W. Mufson is a retired psychologist and is a regular contributor to The Herald-Dispatch’s opinion page. Your email is email@example.com.