W.Va. Budget Analyst Says Justice Tax Cut Proposal Favors Wealthy
Gov. Jim Justice said in a press briefing on Wednesday that his proposed 10 percent permanent personal income tax cut will return $254 million to state taxpayers.
“We will get money and real relief all across the board, to every single taxpayer in the state of West Virginia,” Justice said. “We'll try to make it as fair as we possibly can, remembering that we want real job creators to bring more and more opportunities to the folks of West Virginia.”
Sean O’Leary is the Senior Policy Analyst at the West Virginia Center on Budget and Policy. He sees two problems with the proposal.
He said funding a permanent tax cut based on a temporary surplus could create long-term drawbacks.
“It's the result of a lot of temporary factors, a lot of high gas prices that hopefully aren't going to last forever - and infusion of huge amounts of federal aid over the past year,” O’Leary said. “When you fund a permanent ongoing tax cut based on a temporary surplus, you'll run into problems very quickly.”
O’Leary also said the proposed tiered tax cut based on income favors the wealthiest over the average West Virginian.
“You're going to be giving a sizable tax cut to the wealthiest people in the state, those who have been doing very well during the pandemic and those who have seen their incomes and personal wealth grow,” O’Leary said. “Those being hit hardest by rising gas and food prices, those at the lower and bottom income scale, will see just a couple bucks.”
O’Leary said fair tax relief would come with a fully refundable earned income tax credit, structured after the federal model.
“It directly targets those low and middle income households,” he said. “Because it's fully refundable it can give them a bigger return than just an across the board income tax cut where they're not getting much of it in the first place.”
Justice said he will call a special legislative session on the tax cut to coincide with the upcoming legislative interim meetings set for late July.