CHARLESTON, W.Va. (AP) — West Virginia Gov. Jim Justice held an online discussion Monday to promote his proposal to eliminate the state income tax with the goal of spurring economic investment and population growth.
Justice addressed written questions submitted from the public on the proposal, which he unveiled in his State of the State address earlier this month. But the Republican governor did little to fill in specifics in many areas.
“If we don’t do this, we will regret it forever,” Justice said. “Absolutely it can be done and it will drive opportunities to this state beyond belief. My goal is to lower your taxes now.”
West Virginia lost more than 3% of its population over the past decade. Justice said the end goal of attracting more residents to the state could mean more tax dollars, better schools, and higher wages and property values.
To balance the income tax cut, Justice anticipated changes in severance taxes on production of coal, oil and natural gas. He’s calling for an increase of 1.5% to 1.9% in sales taxes for all residents as well as taxes on tobacco and soda.
The state soda tax of a penny for a 16.9-ounce bottle has not increased since it was implemented in 1951, and the tax on cigarettes last went up to $1.20 per pack in 2016.
Justice said there could be an unspecified tax on some professional services. He anticipates a luxury-type tax on any purchased item of least $5,000, excluding homes and cars.
The governor’s proposal would cut the income tax by half “and let the growth take us there,” he said. “If the growth were not to come, you just stop. You don’t need to do anything else.”
Fully eliminating the income tax would cut nearly half of the state’s budget, or about $2.15 billion. Nine states do not currently have a state income tax.
“I am totally flexible to how we change things here and there,” he said. “We’ve got to incentivize the wealthy from other states to come here. We want them to bring their companies here. So we can’t just throw them to the side.”
But he’s also concerned that lower-wage earners will stay trapped in a “spin cycle” if nothing is done.
Justice said another virtual town hall is set for Wednesday evening.