Tax Plans: Measured, moderate approach is preferable
We regularly forget the lessons we learned as children from the tortoise and the hare. Slow and steady wins the race. But politicians have been rewarded for ideas that are big, exciting –and immediate. Instant gratification makes a better impression with voters than having to play the long game.
In the case of West Virginia’s dueling plans to phase out the state personal income tax, House Bill 3300 appears to have several advantages over Gov. Jim Justice’s proposal. It is a more moderate approach, that would phase out the personal income tax by $150 million each year for 16 to 23 years, depending on revenue streams. It creates an Income Tax Reduction Fund that would be used as a buffer in years when revenue is disappointing. And it does not raise consumer sales and use taxes or excise taxes, remove sales tax exemptions or create a tax on “luxury” goods.
“It’s a slow, moderate common-sense approach to give tax relief without raising any taxes or shifting any taxes,” said House Finance Committee Chairman Eric Householder, R-Berkeley, Monday. “It also is a great tool to control the rate of growth in spending in state government.”
It has its drawbacks, of course. It is, indeed, a slow process; and it should be adjusted to include language that restores the 50 percent of surpluses going into the state’s two rainy day funds, once the state budget is stable enough to account for the loss of personal income tax revenue.
Justice is not a fan of this plan. He believes West Virginians are missing an opportunity if we don’t go for his ideas to eliminate the tax in “a very, very short period of time.” He has cautioned lawmakers against listening to “special interest groups” such as the West Virginia Business and Industry Council, the West Virginia Chamber of Commerce, the West Virginia Farm Bureau, the National Federation of Independent Businesses, and the Council on State Taxation that oppose his plan. To counteract those voices, he brought in his own outside influence, Opportunity Now West Virginia — i.e. former state Senate President Bill Cole, R-Mercer, who owns several businesses throughout southern West Virginia.
The House plan is moderate; slow and boring. It does not provide instant gratification. Those may be the best reasons to give it serious consideration.
“Hopefully the collective minds come together, and we get what is a great answer and a great piece of legislation at the end,” Cole said Wednesday.
Indeed. There are good things about both proposals that could be worked into a third idea, if all parties are willing to compromise, rather than go to battle.
Meanwhile, lawmakers who have the best interests of all West Virginians in mind will remember just because something CAN be done quickly, and with a big splash, does not mean it SHOULD be done that way.