homepage logo

Eliminate the income tax? Sure, to seriously damage schools and a lot more

By Delegate John Doyle - Report From the Legislature | Mar 5, 2021

Governor Jim Justice proposed cutting the state income tax in half this year, with the idea of eventually eliminating it. I think that idea is preposterous.

The income tax brings in slightly more than $2 billion to the state treasury each year, which is just a bit less than half of the state’s general revenue fund (roughly $4.5 billion). The total state budget is around $13 billion, but much of that money is in “dedicated” revenue (it must go to certain ends, like roads). The general fund provides money for a plethora of ends, including schools and colleges, state police and prisons, environmental protection and public health.

The governor has proposed replacing about three-quarters of that money with other taxes, leaving a hole of about $500 million to be closed by cuts in spending. He hasn’t identified those cuts, but they would logically come from programs funded out of general revenue.

Cutting schools, colleges, law enforcement, public health and protection for the environment by that much money would, in my view, be a total disaster. Hey, those who want to “defund the police” could accomplish their goal in this bill! They would just have to accept defunding schools, clean water, health care, education and a whole lot more along with it.

But there’s even more nonsense in the governor’s proposal. He wants much of the money that would partially replace the loss of the income tax to come from increases in the consumers’ sales tax.

He would accomplish that in three ways. The overall state rate would be raised from 6 percent to 7.5 percent (there is an additional local rate of 1 percent in some municipalities that would not be effected by this proposal). Secondly, the “base” of the consumers’ sales tax would be expanded to include all professional services (lawyers, doctors, accountants, barbers, building contractors and myriad providers of other services that are not now required to collect the consumers’ sales tax). And he would tax groceries again.

The net effect of transferring the tax burden from the income tax to the sales tax would have two consequences for all of us, to my mind both bad. Lower income people would see their overall tax burden increased while higher income people would see it lowered. And tourism promotion would, I think, be endangered by the higher sales tax rates.

Opposition to the governor’s plan has already begun to develop, even among Republicans. Many in the governor’s party understand the disaster that would be cause by implementing the idea. I hope we can muster enough Republicans to rally to the cause to defeat Governor Justice’s idea.

Governor Justice and some other supporters of his plan say that doing away with the income tax would bring hundreds of thousands of new residents to our state. Balderdash! People are rarely attracted to a state because of its tax policy. They are attracted by good public services (like schools).

I hope this idea dies of its own weight.

John Doyle is a delegate for the West Virginia District 67. He can be reached at johndoyle@wvhouse.gov.