Recent reports in this newspaper that the city of Wheeling’s revenues are running $1.3 million ahead of last year should be welcome news for city officials and residents alike.

A healthy bottom line means the city has the resources necessary to maintain services, invest in infrastructure and continue improving the community.

But it also presents an opportunity for reflection — particularly when it comes to Wheeling’s primary revenue source: the Business and Occupation tax.

The B&O tax has long been a staple of municipal finances in West Virginia, including here in Wheeling. Yet it remains one of the most outdated and regressive forms of taxation still widely used in local government.

That is because the B&O tax is not based on a business’s profits. Instead, it is levied on gross receipts — the total amount of sales before expenses are deducted. In other words, businesses must pay the tax regardless of whether they actually made money.

For a small business with thin margins, that distinction matters greatly.

Imagine two businesses with the same level of sales. One may be profitable, while the other may be struggling under the weight of rising labor costs, inventory prices or rent. Under a gross receipts tax structure, both pay the same tax — even though one may barely be keeping the lights on.

That is why economists have long criticized gross receipts taxes like the B&O as inherently unfair. They punish businesses not for their success, but simply for doing business.

Wheeling’s B&O rates vary by industry — for example, retail sales are taxed at roughly 36.5 cents per $100 of gross receipts, while service businesses, contractors and others pay higher rates. But the underlying issue remains the same: the tax is applied before a single expense is deducted.

Many communities across the country have moved away from this type of taxation because it discourages investment and growth. In an era when cities are competing aggressively for businesses and jobs, clinging to outdated tax structures does not help.

None of this is to suggest Wheeling should recklessly cut off a vital revenue source. The city depends heavily on B&O taxes to fund services. But when revenues are running ahead of projections, it may be precisely the right time for city leaders to begin a serious conversation about modernizing Wheeling’s tax code.

The goal should not be simply to collect revenue — it should be to do so in a way that encourages economic growth rather than hindering it.

If Wheeling hopes to position itself for the future, it may be time to move beyond tax policies rooted in the past and start building a system designed for the 21st century.