Proposals announced to cut taxes in W.Va.
CHARLESTON, W.Va. (WSAZ) - Democrats in the West Virginia House and Senate are looking to greatly cut the amount of sales tax that families across the state pay.
Democratic lawmakers announced a plan on Tuesday morning that would reduce the state sales tax by up to 25%, going from 6% to 4.75%. The bill would automatically cut the sales tax by another 0.25% later this year when the Rainy Day Fund is projected to reach $1.1 billion.
“This helps every single West Virginian,” Sen. Minority Leader Stephen Baldwin (D-Greenbrier) said during the news conference. “This helps every single West Virginia business. We can afford it right now. Times are good right now in West Virginia, and we can build on this if the economy continues to be strong.”
Baldwin said the state is projected to have a budget surplus this year between $700 million and $900 million, and it is time lawmakers put money back in people’s pockets after spending big to attract businesses.
More than $300 million in incentives and tax breaks were given to corporations last week in a bipartisan effort to bring thousands of jobs to West Virginia. The Democrat proposal would give around the same amount to families across the state.
The 1.5% reduction in sales tax would save a family of three with a $30,000 household income around $122 per year, according to Baldwin. A family of three with a household income of $70,000 would save $201 per year under this proposal.
“We are not picking this industry or that investment or this part of the state, it’s for all of West Virginia,” Sen. Richard Lindsay (D-Kanawha) said. “Regardless of whether you are in Roane County, Jackson County, Clay County or the West Side of Charleston, West Virginia, this will benefit you. This will make a difference in putting food on the table, taking care of electric bills.”
Leaders with the Republican super majority said this Democratic proposal will not even be brought up for discussion in a committee meeting because they plan on reintroducing income tax reform that would use the same budget surplus.
“I don’t believe a sales tax cut is going to impact as many West Virginians as a personal income tax reform will do,” House Finance Committee Chairman Eric Householder (R-Berkeley) said. “I think it’s a bigger win for the taxpayer, a bigger win for our citizens, a bigger win for our state.”
Householder said the Republican plan looks to cut the personal income tax by 10% across the board. He believes the proposal that is being finalized behind closed doors with House and Senate leadership and Gov. Jim Justice would provide broader tax relief than what Democrats are proposing.
“The common theme is let’s use these surpluses to reinvest them to you, the taxpayer, because it’s your money, you deserve it, you have been working hard all your life,” Householder said. “And let’s cap our rainy day fund. Our rainy day fund is already at a billion dollars. This isn’t something new. I’ve been talking about it for the last eight years, and I am glad my colleagues on the other side of the aisle agree.”
“I believe in fair taxation, and sales tax is regressive tax,” Del. Jim Barach (D-Kanawha) said. “People at the lower end of the economic scale tend to put in more of their money into that particular tax. I think this will make everything a little more even for everyone. It will help people out at the lower end of the scale, and they are going to be the ones that will be taking that money more than anyone and be putting it back into the economy.”
The Democrat plan was introduced Tuesday. Householder said the Republican plan will be introduced in the coming weeks. Both plans look to cut taxes as early as this year.
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