More and more members of the House Republican super major are expressing serious doubts about the governor’s grand tax proposal.
“He’s got the subject up to where we can talk about it,” said Delegate Brandon Steele, R-Raleigh, on WJLS Radio’s Radio Roundtable today.
But Steele concluded, “This is a tax shift, not a tax break.”
Governor Jim Justice has gone to great lengths to reduce West Virginia income tax by 60 percent while offsetting most of the tax base with a variety of increases.
An overview of the governor’s plan estimates the initial personal income tax cuts of $ 1,035,650,000 and discounts of $ 52 million for lower-income residents – but also tax increases of $ 902,600,000 to offset most of those breaks .
The proposal would also impose a number of other taxes, including on soft drinks, tobacco, beer and wine. And Justice suggests taxing some professional services for the first time, including law firms, accountants, gyms, and more. He also advocates a “luxury tax” on some items that cost more than $ 5,000. And he proposes a tiering of severance taxes on coal, oil and natural gas that pays more when the markets are better.
Business groups have raised concerns in recent days that the governor’s proposal specifically exempts Category C companies – and other businesses that are essentially sole proprietorships – from the income tax cut.
Said Steele Last Saturday he had a joint venture town hall event that lasted about two hours. “I haven’t found a single person who can really support any aspect of this plan.”
Other delegates have spoken out against the submitted plan.
Delegate Joshua Higginbotham, R-Putnam, said on social media that he was against it.
I’m strongly against @WVGovernor Jim Justice’s massive tax hike proposal. He wants to increase your tax to 7.9%, which would be the highest sales tax in America. I will be an opponent of his bad idea.
– Joshua Higginbotham (@ Higginbotham4WV) March 13, 2021
Another delegate, Austin Haynes, R-Fayette, wrote on social media that he was also against the proposal.
Eric Householder, chairman of House Finance, R-Berkeley, said last week that the committee would be more likely to adopt an entirely different bill with a more moderate approach than the governor’s proposal.
In recent years, the House has been auditing bills to set up a “Personal Income Tax Reduction Fund” and lower the tax rates the fund hits at a set threshold. Last year the House passed the bill, but it didn’t get into the Senate. There were concerns about the longer-term financial implications for the state.
Governor Jim Justice
Governor Justice has described that he wants to cause a sensation with an income tax cut and says: “Nothing has more sex appeal.” He has talked about wanting to cut rates quickly so the state can market itself to people who are drawn to the rate and ready to move here.
Steele pointed out in today’s Beckley radio interview that he is interested in a more incremental approach. He said the business owners he met in his community had urged lawmakers to work out their own plan.
“I think you will see that at least the House of Delegates is going to be a plan that doesn’t fundamentally disrupt our economy, but at the same time pushes us towards a reduction in personal income tax without the corresponding shift from all of these other sales tax-related categories. It’s a little more manageable. It takes longer. But there is no need to do something hastily if it is to be harmful.
“So I’m confident that we can deal with it in the next few days.”
Today is day 37 of the 60-day regular legislature.
Governor Justice, who has hosted a number of town hall events to promote the tax plan, hasn’t had one in a week.
During a public appearance on Wednesday, Senate President Craig Blair, R-Berkeley, said lawmakers are still pushing the income tax proposal.
“Don’t think for a minute that this is going to slow things down for the people of West Virginia,” Blair said at a press conference. He added: “We will continue to move forward as if we had already won.”