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West Virginia Governor Jim Justice Questioned About Tax Reform in Virtual Town Hall

Photo Courtesy of W.Va. Governor’s Office West Virginia Gov. Jim Justice talks to state residents about his plan to phase out the state income tax during a Monday virtual town hall.

CHARLESTON — Gov. Jim Justice brought his plans to phase out the state’s personal income tax to the people of West Virginia on Monday, holding his first virtual town hall on the subject.

The governor fielded questions from state residents on how his plan will work and how will make up the revenue from phasing out a tax that accounts for nearly $2.5 billion annually in revenue.

Justice said the elimination of income tax will not only be beneficial to reduce the tax burden on residents, but will also make the state more appealing for out-of-state residents and businesses to move in as well.

Asked by one questioner to reiterate his plan to fill the revenue gap left with the loss of state income taxes, Justice went back to the list he mentioned during this State of the State address.

He wants to create a tiered severance tax for coal, oil and natural gas, raise the consumer sales and use tax by at least 1.5 percent, increase taxes on soda and tobacco, remove tax exemptions for professional services and create what he called Monday a “luxury tax,” paying more for larger-ticket items. He described it as a “wealth tax” in his State of the State address, but said Monday that “luxury” is a more accurate descriptor.

“We need our natural resource partners to help just a little bit,” Justice said Monday. “We need to go up 1.5 to maybe 1.9 percent in our sales tax. We need to have our professionals help a little bit and we need our tobacco companies’ and soft drink companies’ help on that end as well, or all the people that are buying them.”

Among the things he didn’t want to entertain was a food tax or eliminating the Promise Scholarship, which helps cover college tuition and fees for qualifying in-state students.

Justice and his staff have been researching all 50 states for a tax foundation, but zeroed in on the nine states that didn’t have any income tax, according to state Secretary of Revenue Dave Hardy.

Out of those nine states, Tennessee was the most comparable state due to the geographic similarities between the two states.

“We looked at everything,” Hardy said, “and we tried to sample every state we could find and pick the best things. Also keeping in mind that we wanted to tailor any ideas that we have to West Virginia, and its unique demographics, population, and its unique household income.”

Justice said the state should continue to build off the nationwide success of how it handled the COVID-19 pandemic, stating that the economics of the state are strong and no income taxes will be beneficial for residents to have more funds to support themselves and more opportunities for high-paying local jobs.

“With all the great news on how we have handled the pandemic and people looking at West Virginia, if we get on a pathway to extinguish our state income tax,” Justice said. “Mark it down, it will drive incredible opportunities right here in West Virginia. It will drive job opportunities beyond belief. It will drive the ability for wages to increase substantially, it will help our schools, it will drive up property values.”

Justice said there will be plans to have an additional virtual town hall to answer more questions in the coming months.

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