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Justice offers more income-tax elimination plan details in second virtual town hall

MORGANTOWN – Gov. Jim Justice fielded another round of questions Wednesday evening regarding his plan to eliminate the state income tax. This was his second virtual town hall and he hopes to have more, he said.

Many of the questions duplicated those asked during Monday’s town hall, but there were some new ones and some new bits of information were offered.

Justice offered some opening remarks once again, noting the national media attention placed on West Virginia during the pandemic and his appearance on three FOX news shows. “Now is our moment, when everybody is watching West Virginia.”

He said he hopes to have proposed legislation ready on Thursday.

Revenue Secretary Dave Hardy repeated the broad outlines of what they see as a three-year plan. Immediately cut the income tax for most residents by half effective Jan. 1, 2022, except for the richest who will see theirs cut by just a third.

To make up the losses, starting the same date: Tier the severance tax on oil and gas. Raise the sales tax by somewhere from 1.5% to 1.9%, putting it at 7.5% to 7.9%.

Raise the taxes on cigarettes, other tobacco products, vape liquids and soda. There’s no figure yet for any of the those, but Justice noted the soda tax has been just 1 cent since 1952.

Also, tax professional services, establish a luxury tax on certain items $5,000 and up – probably starting at 3% and tapering down to 1.5% as the price climbs – make some budget cuts totaling $25 million and achieve another $10 million in savings through state employee attrition.

And keep the state budget, $4.569 billion, level for the next three years. That combined with natural annual growth of about $60 millon to $80 million will produce net savings.

Justice said he wants this to be a net positive for everyone. To reduce harm on lower-income residents he wants to provide tax rebate checks for them, somewhere from $100 to $200.

One person said Justice ought to focus on fixing secondary roads before cutting taxes. Justice said the road projects will continue. “But you can’t get them all tomorrow.” Another Roads to Prosperity bond sale is imminent and he’s expecting a federal infrastructure program to come.

Someone asked if the sales tax would hit 10%. Justice said, “There’s no chance on God’s earth that the sales tax is going to 10%.”

And while some think businesses will just pass their tax hikes to consumers, he hopes competition will avert that. “We can make this happen without laying the burden in the laps of our people that are struggling.”

Several asked again about raising the alcohol tax and Justice said that’s on the table, though he previously said the revenue wouldn’t be significant.

Before the session started, some legislators talked about reducing higher education funding and eliminating the PROMISE scholarship.

Justice said Wednesday he sees the impacts on higher education being minimal to nothing and he hopes his plan might drive tuition costs down. “I absolutely will stand in the way of us getting rid of the PROMISE scholarship.”

He summed up his optimism this way: “If we continue on this path that we’re on right here, we’ll have good stuff happen.”

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