Gov. Jim Justice has taken two interesting positions recently.
One, based on his interview with columnist Cal Thomas and printed in The Register-Herald, is that West Virginia’s economy is booming, has a $100 million surplus and people are flooding to the state to spend time and money.
The other is that the state’s progressive income tax must be repealed to spark an economic recovery and attract up to 400,000 people to move here.
First, it is misguided to say that the economy in West Virginia is “hot.” If anything, it is geographically uneven. Currently, the Appalachian Regional Commission has designated 18 West Virginia counties as “distressed,” its worst ranking. The shift away from coal in energy production has created unbelievable hardship among families in counties once reliant on coal mining.
The consequences have included increased drug addiction, increased depression, lower life expectancy, increased deprivation of healthy food and significantly reduced income. Nowhere on the horizon is any jobs-transfer legislation requiring the transfer of affected workers to any new jobs created anywhere, which would be only fair and just to those who contributed so much to America’s prosperity.
Second, it is misguided to say that hundreds of thousands of rich people would move to West Virginia if incomes taxes were eliminated. Similar legislative incentives in the past, such as “right-to-work-for-less,” elimination of the prevailing wage and corporate tax cuts all failed to make a promised difference. In essence, the strategy of “if you build it, they will come” might have worked in the film “Field of Dreams,” but it was only ever an unrealized dream in West Virginia.
In fact, rich people tend to move where quality housing, education, health care, communications and travel are prevalent. Taxes are a small price to pay for the quality of life they seek.
Furthermore, West Virginia already is low, overall, on the tax burden incurred by wealthy people. Phil Kabler of the Charleston Gazette-Mail noted: “West Virginia has the 17th-lowest state and local taxes in the U.S., with a tax burden that is 10.31% below the national average.” It also is ranked 8th for affordability. So why are people not moving here already?
Kabler continued to note that West Virginia ranks 50th for infrastructure, 48th for the economy, 47th for health care, 36th for environment and similar rankings for housing and other criteria.
However, even if the idea of an income tax repeal has some migration merit, Duane Nichols, of Stewartstown, has an ingenious idea. In a letter to the editor in the Gazette-Mail, Nichols suggested that the state offer an income tax break only to those who do decide to move to West Virginia and stay a while.
Conceptually, this idea is similar to what the state has offered to companies, with mixed results, to move their headquarters or production facilities here. Clearly, this would test the premise.
One key reason for a national push to repeal the progressive income tax is the astronomical national debt faced in the country. Someday, it will have to be pared down, and repeal of the income tax ensures that the wealthy, many of whom reaped huge benefits during the pandemic, will be exempt from any of the repayment or, at least, be liable for a significantly reduced share.
Forcing people who have the least — or have been hurt the most — to shoulder an increased burden for the wealthy to have “more” raises the old question of when enough is enough for the “haves.”
According to Americans for Tax Fairness and the Institute for Policy Studies, “the combined wealth of the nation’s 657 billionaires increased more than $1.3 trillion, or 45%, since the pandemic lockdown began.”
As noted by Sen. Elizabeth Warren, D-Mass., “America’s tax system is so ridden with loopholes and special breaks that families in the top 1% pay about 3.2% of their wealth in taxes while the bottom 99% pay a little over double that in taxes.”
As the economy shifts, the government needs a plan to help the communities and people left behind.
Increasing their tax burden is not the answer. Instead, as Mother Jones advised, our job should be to comfort the afflicted and afflict the comfortable, which is exactly what a progressive income tax does.