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This Red State May Cut Income Tax in Half

This Red State May Cut Income Tax in Half

With the financial disaster Americans have been subjected to under Joe Biden, residents of certain blue states, like California and Hawaii, have been living with high-income taxes.

Some red states like Florida, on the other hand, don’t collect tax from residents on income. One red state has now moved to cut income tax in half in order to make life easier for its residents.

The Republican-led House of West Virginia recently passed a bill on Wednesday, January 18, whereby the personal income tax of the state’s residents will be cut by 50%, i.e., half of the current tax rate.

The bill, HB 2526, is the result of Governor Jim Justice’s proposal that would cut the personal income tax of WV residents by 30 percent in the first year and then a further 10 percent each year over the following two years, adding up to a total of 50% tax cut in 3 years.

The Washington Times reported that the Democrat lawmakers in the state support an alternative tax cut plan whereby residents making less than $80,000 a year wouldn’t have to pay income tax at all while those making more than $80,000 a year would continue to pay income tax at the existing rate of 6.5%.

The Republicans, on the other hand, do not believe in taxing only the higher-paying segment of the population because they are the ones who create jobs and contribute to the economy by spending more in employee wages and bringing business to the state.

HB 2526 is now in the WV Senate, where Republicans reportedly are angry with Governor Justice’s tax cut plans. Senate Finance Committee Chairman Eric Tarr calls Justice’s tax plan “very risky” as it gives a big tax cut and accordingly affects the state budget. The state Senate Republicans have their own tax cut plan that would provide some $800 million-dollars-worth of tax cuts to residents as against $1.2 billion resulting from Governor Justice’s proposed plan. Tarr was cited in News and Sentinel as:

“Our income tax makes up more than 40% of our state budget. If we go in and use one-time money to do that large of a cut is very risky. It’s very unsafe.”

Tarr has expressed hope that all Republican sides could come to an agreement on a tax reform plan by March 11, which marks the end of the 60-day legislative session.

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4 Comments

  1. Tom

    Who cares, its WV. Let them do what they want. But see the truth. A plan that does not collect income taxes from folks earning below $80K is a plan to increase the base of the Dem Party. A plan to cut across the board equally is a GOP base builder, and it allows for those rich folks and company owners who are heavier users of infrastructure to pass some of the costs on to low wage earners without them knowing it.

    Bottom line, every square foot of state owned property, every program, every school, every gov facility, takes so much to fund its continued use. Design a realistic budget that details these costs and figure out the best way to collect money to fund it. Pure and simple, and non-partisan. Stop the focus by both parties on how to fill the coffers to get more votes, and start concerning yourselves with where the money goes and the best and fairest way to fund your total needs with sound budget practices.

    Reply
  2. frank stetson

    Winners and Losers, that’s what taxes and tax cuts are all about. WV can cut it’s income tax, but all that means is winners and losers, chances are the bottom line tax revenues, in total, will not change. If they go up, WV citizens got screwed. If they go down, WV services get cut. It’s a zero-sum game.

    Why? Forty state governors must sign and maintain a balanced budget. Less taxes means service cuts. No way out.

    So, if WV lowers the income tax, it MUST make it up somewhere, cut something, or both. No choice. Generally that means more other taxes needed, usually sales is the target.

    So, in WV, those with higher incomes will win as they pay less income tax but probably not too much more in sales tax on everthing they buy which is a smaller percentage of their earnings that those who earn less. Those with lower incomes will forgo less income tax but will see a higher sales tax on everything they buy which is most of their earnings each month. Winners and losers.

    Then they tell you, as The Dumpster has, that these wealthier people will magically take their extra cash and bring new high paying jobs to WV. Or they will buy beach houses in Maryland…… You be the judge but no state can prove that they made it up in new jobs.

    There are places where this works well. Florida is a good case. But Florida has many outsiders buying things while on vacation or wintering there. It’s a different economy that WV where that does not occur.

    Good luck but I would guess the middle and lower classes get screwed blue by this move IF it happens.

    Reply
  3. Andy Robinson

    Not sure that they “Get It” as the author suggests. As a state they receive the 4th highest federal funding per resident of any state in the country. So lets not pretend that this is anything more than political theater. As has already been suggested by others here, the residents will pay one way or another. Less services, lower quality schools, roads, bridges, healthcare, social services, economic development, all just for starters… Great I get $3000 a year back on my state income taxes, but now I have to pay $150 a pop for my kids to participate in extracurricular activities at school, the bus routes are cut in half or run less frequently, my town went from having a fully staffed police force to 70% staffed, it has taken forever for the pothole on my street to get fixed or for the playground to get rebuilt, tuition prices at the state colleges have gone up for the 3rd year in a row, on and on and on and on…

    Reply
  4. Frank stetson

    Republicans, under Trump, practice the art of un-taxing while spending even more. Trump ran up over 25% of our total national debt. In other words, he owns the lion’s share of the national debt created since the time of Reagan. All those other presidents combined hold the other 75%, but no one comes close to trumps egregious borrowing that created a 25% portion of our national debt. Not Bush, not Obama, not push, and Obama combined, no one tops the modern Republican party for un-taxing while spending more.

    Republicans have proven they cannot manage our finances. Every time you hear that they’re going to cut your taxes, prepare for your debt to go even higher.

    Reply

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