More than three weeks after speaking out in favor of lowering his state’s income tax, Governor Jim Justice has released details of the plan.
The judiciary announced on Thursday that he had submitted a bill to lawmakers for consideration.
Although the bill was not immediately available, the governor’s office released a framework for the plan that sheds light on how the state would offset a loss of revenue from the income tax cut.
The plan aims to reduce tax rates for all taxpayers by 60 percent on income from wages and salaries, as well as social security, unemployment and retirement benefits.
“We all have the building blocks in our state,” said Governor Justice in a press release announcing the plan. “We have an economy that is really on the starting grid, some of the greatest people you will ever find, who are smart, kind, faith-based, hardworking people, along with four of the best seasons on earth with more natural beauty than you could imagine. “
Justice said it was time now to “take a big step to overdo ourselves”.
“The final piece of this puzzle is eliminating our personal income tax. It is for this reason that I propose a plan to make this dream come true, starting with a 60 percent cut in state income tax for the first year, ”Justice said.
A summary of Justice’s plan estimates personal income tax cuts totaling $ 1,035,650,000 and discounts totaling $ 52 million. However, some tax increases totaling $ 902,600,000 are being made to offset a large portion of the loss of revenue.
Among these increases, the judiciary is proposing an increase in consumer sales tax (from 6 percent to 7.9 percent). Taxes on natural gas and coal would be restructured in a tiered system according to the abstract diagrams. In addition, taxes on soda, tobacco, beer, wine and cigarettes would also rise. Justice also says he would create a luxury goods tax.
Overall, revenue losses of more than 185 million US dollars are not yet included in the summary published by the Justice Department. However, the executive summary offers a few “options to consider,” including $ 25 million government budget cuts, a $ 10 million reduction in wages due to wear and tear, and projected annual revenue growth of $ 60 million.
The loss of revenue caused by the governor’s plan was criticized by the West Virginia Center on Budget and Policy, a nonprofit policy research organization, and asked for more details.
Kelly Allen, executive director of the WVCBP, called the plan “regressive” and said it would give tax cuts to the state’s rich, shifting the burden on low- and middle-income Western Virgins.
“The plan also cannot fully offset the lost revenue from cuts in income taxes, which means inevitable cuts in public services amid an ongoing pandemic,” Allen said. “We urge the governor to highlight exactly what he wants to cut to balance the budget.”
Finance committees in the House of Representatives and Senate would have an opportunity to reconsider the bill before sending it to their respective floors. The bill had not been officially introduced by Thursday noon and was not on the agenda of the finance committee of the two chambers.