Because West Virginia lawmakers have championed the rapid adoption of pro-growth policies and fiscal responsibility, they have a historic opportunity to transform the Mountain State by enacting once-in-a-generation tax cuts that will put thousands of dollars back in the pockets of hardworking West Virginia families to invest in their lives and livelihoods.
Principled leaders have long advocated for meaningful tax cuts. Now is the time to make good on those promises.
West Virginia has lost population consistently for two generations. Fewer people live here today than in 1972. Any economist can tell you that population loss is a huge drag on economic investment, development, growth and opportunity.
So are high income taxes. Our current income tax is an outdated and detrimental holdover from West Virginia’s tax-and-spend past. The state’s top personal income tax rate of 6.5% is the 17th-highest in the nation — higher than in every state we border and much higher than deep-blue Maryland’s 5.75%. West Virginians making the national median income of $44,000 pay 6%, nearly twice as much as middle-income Pennsylvanians.
A state that has historically lost population, which already ranks 49th in median income and which is notoriously unable to keep the students who attend our colleges after they graduate, no longer can afford to discourage economic investment with punitive tax rates. Fortunately, last year’s budget surplus and improved economic landscape proves that West Virginia can afford to significantly lower its tax rates.
First, global demand for natural gas will remain robust for years to come. West Virginia’s natural gas industry helped yield a record budget surplus of over $1.3 billion last year. Both domestic demand and international events point toward continued growth for that industry, which is leading state policymakers to consider tax relief to return that surplus to West Virginia families.
Second, the coronavirus pandemic has normalized remote work arrangements, untethering workers from urban hubs more than ever before.
Third, the 2020 census confirmed once again that folks are fleeing high-tax states, like California, New York and New Jersey, to enjoy keeping more of their hard-earned money in low-tax states.
Taken together, these facts point toward a commonsense conclusion: it is high time to significantly reduce the state income tax and put West Virginians on a pathway to never paying it again.
The move would immediately put thousands of dollars in taxpayers’ pockets, providing every worker in the state with a pay increase and more money with which to pursue their version of the American Dream. Long-term, as proven by other states, it would transform West Virginia’s economy by creating jobs, attracting workers and businesses to locate here — while creating strong incentives for college students to stay here after graduation.
Instead of being on a pathway to insolvency, supercharged economic growth will produce revenue that shores up the genuine funding priorities that government should pursue like better roads and a social safety net for the truly vulnerable.
To work, tax reform requires spending reform, too. As states like Utah, North Carolina and Indiana have shown, holding the line on spending while reducing waste enables the benefits of tax relief to take deeper root and bear better fruit.
The same fiscally responsible budget leadership that has consistently forced West Virginia to live within its means, adding to the budget surplus, is exactly the kind of prudent policymaking the state will need to seize the opportunity they’ve created through good stewardship of taxpayer dollars to adopt a more pro-growth tax system.
West Virginia’s unrivaled natural beauty, the advent of remote work, the global trajectory of natural gas demand, the millions of families in nearby states looking to escape tax-and-spend governments, the track record of prudent tax reforms in other states, our current indefensibly high income tax rate, and a budget surplus all point to the same thing: It’s time for state lawmakers to step up to meet the moment by keeping their promise to enact bold, transformational tax cuts that will help generations of West Virginians thrive and quickly usher in a new era of prosperity for our state.
