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West Virginia Needs a Better Tax Climate

1 min readBy: Curtis S. Dubay

West Virginia Governor Manchin called the legislature into special session today to work on taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. reform. The legislature will debate a plan submitted by the Governor based on a report by the Tax Modernization Project—a panel he assembled.

The Charleston Daily Mail printed a Tax Foundation op-ed today calling for a stronger plan than the Governor’s proposal.

It is no secret that despite a booming economy nationwide, West Virginia lags in economic development. Only Mississippi and Louisiana have lower per capita incomes.

How can high-income jobs be retained, or better yet, attracted? The only quick fix is the state’s tax system. The governor called the Legislature to a special session this week and submitted recommendations based on the Tax Modernization Project’s lengthy report.

The governor’s recommendations fall well short of providing meaningful tax relief. This is too bad, because taxes matter desperately to businesses and individuals. Businesses always consider taxes when deciding where to expand. And those comparisons hurt West Virginia no matter how they’re done.

The analysis was based on the 2007 State Business Tax Climate Index. West Virginia’s tax climate ranks as the 34th friendliest to business.

West Virginia has long lagged behind the rest of the country in terms of economic growth. The commentary concludes:

From 2000 to 2005, Virginia’s employment grew at a rate of 8 percent and Pennsylvania 3 percent while West Virginia’s fell.

The time is now for West Virginia to stop hurting its own economy, and the tax code is the place to start. Encourage the governor to expand his plan, so that it’s bold enough to spur economic growth. Taxpayers and the newly employed will be grateful.