Personal Taxes

W.Va. Gov. Justice Pronounces Justice four All Plan to Abolish State Earnings Tax

CHARLESTON, W.Va. (WSAZ) – West Virginia Governor Jim Justice unveiled a fourth plan on Monday to eliminate state income tax.

He has dubbed it “Justice 4 All” as the plan, unveiled during his income tax summit with lawmakers, aims to ensure that no one is financially harmed by the proposal.

The summit was announced following the debate on West Virginia House Bill 3300, which is the version of the House’s judicial plan to abolish the state’s income tax.

However, Justice’s original proposal and the new Senate version of that bill would impose a number of taxes to make up the difference. In these versions, you’d pay a little more for goods and services out of the thousands of dollars you would save in income in VAT.

“Every single West Virginian will end up with more money in their pockets than they started,” Justice said of the new plan. “It’s not complicated. It is not.”

Under the Justice 4 All plan, the governor said that income tax would not be cut anytime soon. In the first year of the gradual cut, half of each person’s income tax bill would be eliminated along with a third of business tax.

The sales tax would be increased by the amount in the original proposal of the judiciary to 1.9 percent, slightly less than the 2.5 percent in the Senate version. The judiciary also adjusted taxes on coal, soft drinks, alcohol, tobacco and the lottery to find a compromise. Justice said he would reinstate nearly $ 52 million in discount checks to ensure the state’s low-income earners are not hurt by these increases.

Senate President Craig Blair (R-Berkeley) said he believed the numbers Justice came up with in his new compromise plan, which includes parts of all three previous versions, and that the bill would gain more support in the Senate due to the cut in severance taxes on coal. Blair said this bill has the power to attract more people and businesses to the state, which would create higher-paying jobs, increase property values ​​and make West Virginia a place people want to move.

“The fact that you are picking up people traveling to this state. What is the percentage increase in tourism that we have seen in this state over the past four years? “Asked Blair. “It’s amazing. I don’t know,” Justice replied. “It’s really big,” Blair concluded.

But other lawmakers didn’t support the governor’s plan as much. House spokesman Roger Hanshaw (R-Clay) said delegates are usually concerned about people in border districts going to another state to buy goods and services with a lower sales tax.

The House Financing Chairman, Del. Eric Householder (R-Berkeley) said the house version of the bill did more to stimulate economic growth and had a high favourability rating despite the minimum 12-year term for income tax to expire. He said it especially helps attract high income individuals to the state and fuel business development.

Senator Eric Tarr (R-Putnam), chairman of the Senate Treasury, raised concerns about the reliability of severance taxes compared to the personal income tax or the food tax, which he reinstated in his draft bill. Tarr said Biden’s government is trying to cut down on coal and other fossil fuels to help the environment and that would hurt the state’s revenues.

“Regardless of what is generating the surplus, it doesn’t matter if it’s coal, it doesn’t matter if it’s sales,” Tarr said. “It doesn’t matter what it is, but whatever that excess goes over the budget that it would create. This bucketing mechanism, be it coal or something else, would fund the income tax cut. But, at least in my opinion, you need to make that excess with a smoothing mechanism, so it’s not dollar for dollar for your excess. Because if you have a large surplus one year and a small surplus the next, you need to consider stability. “

Legislators agreed that the abolition of income tax would create more employment opportunities, especially for companies outside of the state looking to do business in West Virginia. However, they weren’t sure if this was the right time to tackle an important issue at the end of a year, the legislature.

“We’re here on day 55 and our focus is on balancing a budget, a flat budget to help the people,” said Doug Skaff (D-Kanawha), minority chairman of the house. “The timing is what I’m questioning. I told you that. We’re coming out of a pandemic. I understand the pros and cons so you think we need to act today because these people are looking at you and how well we are, the vaccines are ahead of the curve and people may want to move to West Virginia because we are exactly there are. But the reality is that some of our numbers and the surplus have been inflated. “

“People want security,” Skaff continues. “You want reliability. They want to get their feet back on the ground. They want to know that their business can have a climate they can believe in. So today I doubt the urgency that we must hurry and do this. I would be everything to us if we met several times over the next few months and throughout the summer. Let’s get this right. Let’s do it right. It’s part of the Senate plan, part of the house plan, part of your plan. Let’s get this right and I would all be there. “

Stephen Baldwin (D-Greenbrier), chairman of the Senate minority, said he wanted to ensure that reducing the revenue from the abolition of income tax does not result in cuts in critical programs like education and health care. Justice said he is committed to ensuring that people still have all the resources they may need, and universities like Marshall University and West Virginia University continue to grow with additional funding.

The judiciary ended the summit by asking lawmakers to continue working on these efforts to get the money back into the hands of the people.

The Senate version of HB3300 will be available for modification and voting on Tuesday. The WSAZ tried to ask the draftsman of the bill, Senator Tarr, after the summit if there would be any changes to the bill before the vote, but declined to comment.

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