Shortfalls: Tax cut deserves a look, but reality must prevail
Legislators of both major parties delight in being able to hand out tax breaks. But priorities have to be set. For example, tax relief that can help create jobs ought to be high on lawmakers’ lists.
Fiscal realities enter into the picture, too.
A tax break approved last year by West Virginia legislators ought to be improved upon, Delegate Randy Swartzmiller, D-Hancock, believes.
Lawmakers agreed to eliminate state income taxes on some Social Security benefits received by Mountain State residents. But they capped the break, making it applicable only to individuals earning $50,000 or less a year and couples earning $100,000 or less.
There should be no income caps on the break, Swartzmiller believes. That is not a new position for him; he opposed the caps as lawmakers were considering them and has continued to do so since.
Swartzmiller pointed out the House of Delegates had agreed to an unrestricted bill eliminating state income taxes on Social Security benefits. It had been estimated that would have a $50 million a year impact on the budget. But state senators added earnings limits — and that took the annual budget impact down to just $10 million.
Ideally, no West Virginian would pay state income taxes on any earnings, including Social Security benefits. But state government has to be funded somehow and, to date, no one has offered an alternative to the income tax.
Clearly, with the state budget still in perilous waters, not collecting as much revenue as had been hoped, lawmakers will be leery of Swartzmiller’s proposal. If indeed the impact of lifting all restrictions on earnings would mean another $40 million a year in revenue losses, such action simply may not be practical.
That does not mean legislators should not take another look at the measure. Perhaps it can be tweaked to grant a bit more tax relief to Social Security recipients.
In Swartzmiller’s mind, that may fall into the “half a loaf” category. But, as they say, half a loaf is better than none at all.