West Virginia’s Justice holds town hall on abolishing state income tax

(The Center Square) – In a town hall regarding a plan to abolish the West Virginia income tax, Gov. Jim Justice answered questions about how it would provide growth in the state and how his plan would make up the lost revenue.

“One of the things that I proposed in my State of the State address was the elimination of our state income tax over time,” Justice said. “It will be an absolute net savings to us all and a real opportunity for those that are really struggling in our state to pull out of those struggles and get a job that will actually pay you more money. This is an opportunity for you to ask your questions to me and for me to be able to answer you directly.”

Justice’s plan would not immediately end the state income tax. Rather, the proposed legislation would first cut the tax in half for most West Virginians and by one-third for the wealthiest. After the state sees economic growth, his plan is to introduce legislation that would repeal the tax completely, although there is no set timetable for this in the proposal.

The proposal would still be a complete overhaul of the current tax system, which takes in $2.1 billion of its revenue from income taxes, accounting for more than half of the yearly revenue. To account for lost revenue, Justice is proposing several tax increases, including a 1.5% sales tax increase, a hike on taxes for cigarette and soda purchases and a luxury tax on large purchases.

An immediate income tax cut as proposed would also require about $25 million in cuts and a budget spending freeze for the next three years. With Republicans now having a supermajority in both chambers of the legislature, lawmakers intend to work on this legislation.

During the town hall, the governor told questioners he does not see any downside to his plan. Justice said the state has successfully handled the COVID-19 pandemic, took care of its farms and landed a deal with Virgin Hyperloop, but that they’re still losing population. He said working to abolish the income tax will take the step to the next level and provide monetary savings, job opportunity and an opportunity for wage increase. Also, he said it would help schools and drive up property values.

The governor assured West Virginians the proposed wealth or luxury tax would not impact anyone’s current situation because it wouldn’t levy taxes on anything a person already owns. The tax, he said, would only affect new purchases of individual items that cost more than $5,000. Those who can afford large purchases, he said, should pay a little more.

When asked about a possible liquor tax increase to offset costs, Justice said that would be on the table. However, he said he does not think the state takes in enough revenue from those taxes for a modest increase to bring in enough money to help offset revenue losses. He said a gasoline tax to offset costs is not on the table, arguing that residents already pay enough for gasoline.

After a resident asked why Justice held his virtual town hall during the work day on short notice, the governor said this will be the first of many town halls to address the questions and concerns of West Virginians.

The next town hall will be Wednesday.

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