Home Finance’s chairman is open to a full change to Justice’s tax proposal

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House Finance's chairman is open to a full change to Justice's tax proposal

Eric Householder, chairman of House Finance, says Governor Jim Justice’s tax plan is unlikely to set a committee agenda.

Eric Householder

“It will look very different from what the governor proposed,” Householder, R-Berkeley, said on MetroNews’ Talkline this morning, describing an entirely new bill that could be picked up by the Finance Committee.

The CFO said he had to speak to the governor about a meeting next Wednesday.

“You will likely see a scrap replacement. I suggest that, ”said Householder today. “I will probably meet the governor next Wednesday and have a private conversation with him about which way we should go.”

Today was the 31st day of the 60-day regular legislature.

Eric Householder, https://t.co/rn6maOBVPd. The State Delegate (R-Berkeley) speaks to @HoppyKercheval about Governor Justice’s tax burden. WATCH: https://t.co/yCFQ3nDJuy pic.twitter.com/87Zzt8k5Yu

– MetroNews (@WVMetroNews) March 12, 2021

The governor is proposing a 60 percent cut in state income tax, suggesting this will be a splash that will fuel population growth. He wants to completely remove the tax within three years and rely on this growth.

Income tax makes up about $ 2.1 billion of the state’s tax base, about 43 percent of the general fund for government services such as education and healthcare.

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 businesses – and other businesses that are essentially sole proprietorships – from the income tax cut.

However, many of these companies would be subject to new sales taxes under the plan.

That was also the concern of the households.

“If you pay income tax from any source, you should get a tax break,” said Householder.

“I think there is a slower, more moderate approach we can take to get tax breaks – take smaller bites of the apple, so to speak.”

Over the past few 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.

“I think we could be a little more moderate,” said Householder.

But the governor might not agree.

Governor Jim Justice

The judiciary has described that it wants to cause a sensation with a sharp cut in income tax. And he wanted to get rid of it within three years or so.

The governor envisions being the only state in the region with no income tax and believes this will put the state in a unique position to benefit from the mid-Atlantic economy and lead to population growth.

“Nothing has sex appeal like getting rid of your state income tax,” Justice said last month.

During his last town hall event on Thursday evening, Justice objected to the corporate groups objecting to lawmakers. The governor said, as he has often done before, that companies must be willing to make sacrifices so that other West Virgins can lower their income tax.

“You can’t let the lobbyists miss your opportunity,” Justice said. “And if you do that, you can’t blame me. You can’t blame me. I’m really trying to really help you. “

However, the governor also acknowledged that his proposal could change as the legislative process progresses. However, it seemed to describe small changes rather than restructuring.

“As this bill goes through the legislature, I applaud legislators to tweak here and there,” he said. “If we change a little here and there, that’s great.”

Larry Rowe

Some delegates have spoken publicly about their concerns about the governor’s bill. One of them was Delegate Larry Rowe, D-Kanawha, who spoke about the plan during a “Members Remarks” meeting this week.

“Tax shift helps some and hurts others,” said Rowe, D-Kanawha, a member of the House Finance Committee.

He said the increased sales tax would hit those who can least afford it. And he suggested that western Virgins living in border districts cross the state line to avoid paying those taxes. “It’s going to destroy our economy in the cities along the borders,” Rowe said.

And Rowe said, “The tax makes every transaction a taxable event – transactions with attorneys and accountants filing your tax returns, I believe, haircuts, taxes on services that have never been taxed before. Again, large law firms and large accounting firms can easily get the work over the bridge and make money without paying 8 percent of their gross income. “