Gov. Jim Justice hosts town hall to discuss legislation to cut W.Va. income tax

WTAP News @ 6 - Justice tax cut
Published: Jan. 23, 2023 at 7:00 PM EST
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CHARLESTON, W.Va. (WTAP) - Governor Jim Justice hosted a town hall Monday in Charleston to discuss legislation to cut the West Virginia state income tax by 50% over the next three years.

The legislation, House Bill 2526, is currently under consideration by the Senate Finance Committee. During his town hall, Justice said he remains hopeful of the bill’s chances to pass the Senate. Justice said during his town hall that the tax cut would “explode growth” in West Virginia and bring new people to the state, putting one billion dollars back into the hands of West Virginians.

However, analysis from the West Virginia Center on Budget and Policy paints a more nuanced picture. For one, the Center’s executive director Kelly Allen said income tax cuts disproportionately affect the wealthy. The Center projects that those earning more than $467,000 would receive 65% of the tax cut. A household earning between $39,000 and $65,000 a year would only save about 58 dollars a month.

Additionally, Allen said the streams of revenue the state would have to fall back on in the wake of an income tax cut are largely temporary, like higher sales taxes that result from inflation or federal dollars from Covid relief. “The federal relief is running out, inflation is coming down,” Allen said. “For folks who’ve been in West Virginia for any period of time, we know that the boom in energy prices is always followed by a bust, and when all those things come back down to earth, that revenue is going to be gone. And if we use it to permanently cut the income tax, we’re going to find ourselves in a budget hole very quickly.”