West Virginia: One other Tax-Free Heaven?

West Virginia is unique among the 50 states in America.

At a meeting in Wheeling, Virginia, in 1861, delegates loyal to the Union from the northwestern counties of Virginia voted to break away from that state over the issue of slavery and its refusal to be part of the Confederate States .

West Virginia is trying to “loosen up” again, this time on taxes.

While the Biden administration plans to raise federal income taxes to cover the overspending, West Virginia Governor Jim Justice plans to lower and eventually eliminate his state’s income tax. If successful, West Virginia would join nine other states that do not impose state income taxes on their citizens.

Though his state has seen its population decline for 70 years, Governor Justice believes that now is the time to reverse the trend by cutting the state’s income tax by 60 percent in the first year, eventually leading to its elimination.

In an interview, I asked the governor his reasons for wiping out his state’s main source of income. He said it’s because the state’s economy is booming and now has a “$ 100 million surplus” despite the pandemic. That’s because businesses, including restaurants, are “100 percent open” and people flock to the state to spend time and money.

He estimates that if his tax cut proposal passes the majority of Republican lawmakers, “it will put $ 2,200 more in people’s pockets. Every single person in the state will end up being positive in cash. “

What about those who don’t earn enough to pay state income tax? “I’m just going to write you a check,” he says. The governor says that the expenses will be paid and the lost income will be made up by increasing the state sales tax from 6 percent to 7.9 percent “for beer, sodas, tobacco and luxury goods”. He predicts that his proposal will increase property and home values, leading to more jobs and higher wages.

Such an outcome would emulate the pre-pandemic economy under the Trump administration, which lowered federal income taxes.

When asked why the state is seeing relatively strong financial numbers when many other states are in trouble, Justice says, “It is absolutely economic growth. Our tourism industry, our state parks – everything – is booming in West Virginia. This applies to high tech, higher education, medicine, tourism, etc. “

With the economy improving, will the governor accept the state’s share of the $ 1.9 trillion bill recently passed by Congress and signed by President Biden?

“Absolutely,” he says. The problem, as the Wall Street Journal noted, is this language in the measure: “No state or territory may use the funds, directly or indirectly, to offset a decrease in net tax revenue.”

Governor Justice accuses Senator Joe Manchin (D-WV) of including that language in the bill, but he says he will comply with the law if it is interpreted to thwart his proposed tax cuts.

A federal fair or flat tax – even a “use tax” – instead of a graduated income tax has been a dream of many Republicans and Conservatives for decades. Not only would this give everyone a “skin in the game” as opposed to the current situation where half of the country pays no federal income tax, but it would also eliminate much of the class struggle that the left uses to tax “the rich” and “the rich” rise successfully.

If Governor Justice can manage the legal challenges likely to arise from his proposed cut in state taxes, West Virginia could serve as a model for other states and even the federal government. This would require many voters to step off the gravy train and take more responsibility for themselves.

(Readers can email Cal Thomas at tcaeditors@tribpub.com. Look for Cal Thomas’ latest book, America’s Expiration Date: The Fall of Empires and Superpowers, and the Future of the United States ”(HarperCollins / Zondervan).

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