Saturday, May 25, 2024
HomenewsThe Best Strategy is to Reduce Income Taxes

The Best Strategy is to Reduce Income Taxes

According to a Wall Street Journal opinion piece published on Tuesday, cutting the personal income tax rate will benefit West Virginia through new growth and, if done carefully, will not have a negative impact on the state’s economy. Gov. Jim Justice and members of the state House of Delegates already knew this.

Justice proposed House Bill 2526, which the House overwhelmingly approved (95-2), to cut personal income tax rates in half over three years.

If passed, the state’s highest income tax rate would drop from 6.5% to 3.25%, which would make it lower than all of its neighbors except for Pennsylvania.

The Wall Street Journal’s Editorial Board had this to say on tax cuts: “Statehouses all over the country are continuing to lower taxes in a process that shows no sign of slowing down.”

Nearly half of all states will have lowered their income tax rates within three years by year’s end. We are in a healthy economic and political cycle, as evidenced by the positive results so far.

With proposals to reduce income taxes, at least six states have begun their 2023 legislative sessions. After being hesitant last year, large GOP majorities in Utah and West Virginia are considering hefty cuts.

The editorial claims that states began lowering taxes in 2021 as revenue receipts rose. Since then, 21 states, according to the Journal, have decreased their income taxes to stimulate quicker economic growth.

The Best Strategy is to Reduce Income Taxes

According to Justice, reducing income taxes will boost the economy by returning money to individuals rather than implementing new, expensive programs. They will also help West Virginia’s population grow.

The Journal also addressed skeptics’ worries that economic harm from tax cuts will result. Those who oppose tax cuts frequently assert that there will be a revenue bust in the future by citing the underwhelming outcomes of Kansas’ 2012 tax cut.

Recent governors, on the other hand, have been careful, often making cuts that are smaller than what the official revenue estimates would allow.

That is exactly what Justice is recommending: a phased-in strategy that will reduce the tax rate by 10% after the first two years and by 30% after.

Some Recent News You Might Like:

And just in case, he suggested putting $700 million of the state’s $2 billion excess into an emergency fund.

Another thing Justice is aware of is that people are willing to relocate to states with lower tax rates. The states that bring in the newest inhabitants from other states, from Florida to Texas and Idaho, typically have significantly lower tax rates.

According to the Journal, states with declining populations like New Jersey, New York, and California have some of the worst tax laws. “The trend is compounding, and competition is pushing states toward better tax codes.”

At least there are more areas for Americans to relocate in states that haven’t joined the tax-cutting coalition. West Virginia must be one of those locations.

A pro-growth tax structure can be created by the legislature to achieve that. The Northern Panhandle senators must take the initiative on HB 2526 since residents there can now take advantage of all that West Virginia has to offer while residing in Ohio or Pennsylvania.

The West Virginia Senate’s 34 members must act swiftly on this bill. The best strategy is to lower income tax rates.

RELATED ARTICLES

Most Popular