[ politics ]
Tack l i ng We stVi r g i n ia ’ s Ta xCode
SAMANTHA CART
TRACY A . TOLER PHOTOGRAPHY
State leaders have recently deliberated repealing West Virginia ’ s personal income tax . Renowned economist Dr . Arthur Laffer has a proven plan for rationalizing the state ’ s tax code to create economic growth and prosperity .
Benjamin Franklin once wrote , “ In this world , nothing is certain except death and taxes .” Over 200 years later , the saying seems to hold true . It is nearly impossible to turn on the television , listen to a podcast or enter a conversation on current events without hearing an opinion on who should pay and how much .
During the 2021 session of the West Virginia Legislature , Governor Jim Justice submitted a bill to repeal personal income taxes . Justice ’ s press promoting the bill said it was aimed at transforming West Virginia ’ s tax structure , raising wages and home values , attracting new businesses and reversing the state ’ s trend of population decline . House Bill ( HB ) 3300 would have repealed personal income taxes completely and called for raising taxes in other areas to offset the cuts . The House of Delegates unanimously voted against it shortly after it was proposed .
This year , the Legislature took up a new , more conservative proposal — HB 4007 — toward repealing personal income taxes in phases , starting with a 10 % reduction on current income tax rates on January 1 , 2023 . While the bill passed the House , it did not make it past the Senate Finance Committee before the end of the session .
Although the potential benefits Justice outlined are inarguably attractive , opponents on both sides of the aisle argue that repealing personal income taxes would result in the necessary and significant increase of taxes in other areas , including taxes on businesses and professional services , which could cause Mountain State professionals to move their practices across state lines . Some say there is absolutely no feasible way to balance the budget without this large revenue stream . All this begs the question : is there a responsible , practical and logical way to repeal the personal income tax ?
In 2016 , West Virginia Executive sat down with academic economist , professor , author and political advisor Dr . Arthur Laffer , founder and chairman of the economic research and consulting firm Laffer Associates , to talk about West Virginia ’ s economy and how to generate economic growth . His recommendations included switching to a lowrate , broad-base flat tax ; eliminating inventory taxes ; implementing tort reform ; providing incentives for students ; and becoming a zero income tax state .
With the ongoing conversation surrounding personal income taxes , it seemed like the perfect time to once again reach out to Laffer , who is well-known for his influence in starting a worldwide tax cutting movement in the 1980s . As the first person to hold the position of chief economist for the U . S . Office of Management and Budget , founding member of the Congressional Policy Advisory Board , a member of President Ronald Reagan ’ s Economic Policy Advisory Board and a member of the Reagan / Bush Finance Committee ’ s Executive Committee , Laffer ’ s economic expertise is unparalleled .
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