Editorials, Opinion

Repealing state income tax still just a pipe dream

On Aug. 22, a short essay by Delegate Eric Householder, a Republican and chair of the Finance Committee, discussed the potential “generational opportunity” that cutting the state income tax would create for West Virginians.

One of our readers rightfully called him out the following weekend (DP-08-29-21): Cheryl Brown pointed out that Householder offered optimistic generalizations but no solid evidence to support his claims, and, as she phrased it, “I would still never consider moving to a state just because it had no income tax. We know people have left West Virginia for jobs elsewhere; they aren’t considering tax policy either.”

For some reason, West Virginia’s politicians insist on reviving this particular pipe dream despite its spectacular failure in the last legislative session. And it will likely continue to fail because West Virginians are savvy enough to realize that a progressive income tax puts more money in their pockets than a high flat tax.

To clarify, progressive taxes are ones that increase with the dollar amount, like our current income tax. A person making $30,000 a year pays a lower rate of income taxes than a person making $100,000 a year. A flat tax, on the other hand, applies to everyone equally, such as sales tax. In general, flat taxes have a greater impact on people with less money than they do people with more money. For example, two people buy $400 worth of back-to-school supplies — $424 total, with 6% sales tax. Person A only makes $1,000 a month but Person B makes $2,400 a month. That $24 in tax takes up a greater percentage of Person A’s take home money than Person B’s, which is why flat taxes force people with lower incomes to carry a heavier financial burden.

Householder also talks about trimming $50 million a year from state spending. Where, exactly, does West Virginia have $50 million to cut? We’re not sure if he’s noticed, but every major social and infrastructure system in the state is chronically underfunded.

Health departments: Underfunded.

Road repair: Underfunded.

Schools: Underfunded.

The list could go on and on. So what would we be losing if we cut $50 million out of the state’s annual budget? We guarantee it wouldn’t be pay for legislators like Householder.

As Brown wrote in her letter, tax policy is not what attracts people to live in new states. What does? Good public schools. Good health care. Good roads. Job opportunities that pay more than minimum wage. Reliable public transportation. Strong broadband infrastructure. Amenities like parks and shopping and eateries — bonus points if there’s an accessible and thriving downtown.

If Householder wants to pioneer a “generational opportunity,” he needs to start by promoting and improving the features newcomers are looking for — not wasting time on a repealed income tax pipe dream.

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