MORGANTOWN – Gov. Jim Justice on Monday held the first of what he plans to be a series of virtual town halls to educate and sell the public on his plan to eliminate the state personal income tax.
“This is a hot topic around our state,” he said during opening remarks before fielding questions submitted online. “It ought to be a topic that is blazing hot.”
Justice broadly outlined his plan during his State of the State Address Feb. 10. This fiscal year, personal income tax revenue is estimated at $2.6 billion, nearly half of the $4.574 billion General Fund budget.
First step, he said then, is immediately cut the income tax for most residents by half, except for the richest who will see theirs cut by just a third. He didn’t mention any income numbers.
To make up the losses, he revisited some old proposals and added some new ones. Tier the severance tax on oil and gas. Raise the sales tax by 1.5% to 7.5%. Raise the taxes on cigarettes and soft drinks, which will raise revenue and have health benefits, he said. Tax professional services, establish a wealth tax and make some budget cuts totaling $25 million.
“You don’t need a governor that’s just going to sit here now and take a victory lap,” he said Monday. “If we don’t do this we will regret it forever. … If we can accomplish this it will be absolutely the greatest thing you can ever imagine.”
Asked what the downside of his plan is, he said, “I see none.” Just cut the tax in half and sit back and let the growth take us where he wants to go, he said. “It won’t cost us anything except a tremendous amount of people that will come and bring goodness to this state.”
Several people asked about the wealth tax and Justice admitted that was a misnomer. He meant it will be a kind of consumption or luxury tax: an additional charge, maybe $150, on single items costing $5,000 or more. It wouldn’t apply to cars or household projects or other necessities, to income or savings or investments.
But it would apply to a $12,000 bracelet, he said. “I feel like our most wealthy should contribute more.”
Several people also asked about increasing the tax on alcohol. Justice said it’s not off the table, but gross alcohol tax revenue isn’t significant. “I don’t know that it could help us a lot.”
Justice said he’s not for recreational marijuana but said in response to a question that there is a nationwide movement to legalize it, and if that happens and if the state can draw tax revenue from it, we should do it.
Revenue Secretary Dave Hardy told one questioner they looked at all nine states without an income tax for ideas, picked the best ones and tailored them to West Virginia.
Justice nixed the idea of raising the food tax, saying he would veto it. He’s looking at raising the tax on unhealthy things like soft drinks and tobacco.
When someone said a soda tax hike might diminish sales, he said he’s eyeing a 4-cent-a-can soda tax. Even at 5 cents a can, a person would have to drink 1,600 cans a year to pay $80 – and maybe they need to slow up a bit if they’re drinking that much.
On the contrary, he said, look at the benefit if lowering the income tax increases the state population by 20%. That’s 20% more people buying soda, so sales will go up.
He plans no hikes in DMV fees, he said, to make up any tax losses.
But Legislative leaders, he said, assure him they can cut $25 million from the state budget without hurting anything. And he can achieve another $10 million in savings by not refilling some agency positions vacated by retirees.
Justice said he will need many more town halls to get his message out. He’s planning one for Wednesday evening when people are off work and more can tune in.
Tweet David Beard@dbeardtdp Email dbeard@dominionpost.com
