CHARLESTON, W. Va. (TBEN) — West Virginia’s Republican-dominated House of Representatives passed a historic 50 percent cut in the state’s personal income tax on Wednesday, rejecting a Democrats’ plan that would cut taxes for the lowest earners all at once. have abolished from the poorest American states.
The bill—a proposal from Governor Jim Justice—passed the House of Representatives 94 to 2, with four members not voting. It now heads to the Senate, where legislative leadership has clashed with justice over proposals to cut taxes for nearly two years.
In a statement immediately after the vote, the Republican governor said the cut would “put money in the pockets of hard-working West Virginians.”
“There is no better incentive than this. Period,” said Justice. “I encourage the Senate to vote in favor as soon as possible.”
The Justice Department’s plan would cut income tax across income groups incrementally over the course of three years: 30 percent the first year, and another 10 percent each year thereafter. He has described the plan as a “tsunami in West Virginia” and a first step toward completely eliminating the state’s income tax.
House Republicans moved quickly to pass the legislation, green-lighting the proposal just a week after Justice announced the plan during his State of the State address and lawmakers signed up for the 60 on Wednesday. day legislative session.
“Ultimately, a prosperous economy will solve a lot of the problems we’re debating in this body,” said Republican Representative Matthew Rohrbach. Nearly 17% of West Virginia residents live in poverty and the median household income is $50,884, according to the US Census Bureau.
The personal income tax rate in West Virginia is 6.5%. The income tax rate in the neighboring state of Ohio ranges from about 2.8% to 3.99%. Kentucky has a flat 5% individual income tax. There are 15 states with a higher tax bracket than West Virginia, Rohrbach said. Eight US states have no income tax at all.
The Democrats’ plan would have cut income taxes entirely for earners making less than $80,000 a year, or 72 percent of the state’s residents, according to lawmakers. People earning more than $80,000 will continue to pay personal income tax at the current rate of 6.5%.
“What the Democratic plan is trying to do is, ‘Keep it simple, stupid,'” Democratic Rep. Joey Garcia said. “Let’s start with the people who need it most.”
A family making $80,000 would have saved $4,075 per year under the Democrats’ plan, a family making $60,000 would have saved $2,778; a family earning $40,000 would have saved $1,575. The cuts under the Justice Plan for those income groups would be half for those income classes.
Democratic Rep. Larry Rowe said the governor’s plan isn’t fair because the more money people make, the bigger the tax break.
“All we’re asking is that they pay their fair share of what they’ve taken out of this society,” Rowe said. “If you’re able to make a million dollars in income, a lot of things clicked to get you in that position. Pay your way, pay it back.
“We can run and hop barefoot through the cornfields and give big tax breaks, if we’re going to do it,” he continued. “The plan here is very simple: be honest.”
Republican Rep. Marty Gearheart said the bill’s underlying idea is to put the state on the path to completely eliminating income taxes. But he said lawmakers should take a measured approach.
“It doesn’t respect all West Virginians, especially those who worked hard, worked smart and put their money on the line to make a taxable amount,” Gearheart said of the Democrats’ plan. to get out of there. However, it’s not something that can be done with a snap of a finger. That will get us a long way.”
He said the way to do that is “a little at a time” and not by favoring one group of residents over another.
“It seems to me that those who pay more taxes will get more dollars in breaks because they pay more taxes,” he said. “They contributed more to the state of West Virginia from an economic point of view than those who paid less in taxes.”
Republican Rep. Daniel Linville said those earning higher incomes are job creators who can hire additional workers if they see a tax cut.
“I have to say it’s hard to earn a wage without an employer,” he said.
Senate GOP leaders are expected to submit their own tax cut proposals.
The governor proposed a permanent 10% income tax cut in July after the state ended the fiscal year with a record $1.3 billion surplus. The state senate declined to comment on the proposal at a special session that month.
In October, the Justice Department came up with another plan, saying it wants to eliminate a personal property tax that residents pay annually for vehicles. The following month, voters rejected a proposed constitutional amendment designed by state legislators that would have allowed lawmakers to remove a business and inventory tax, along with the personal property tax.