Report: West Virginia gets mixed rating on tax freedom – The Center Square

(The Center Square) West Virginias tax freedom received mixed ratings in the annual Facts and Figures report released by the Tax Foundation, finishing well in some areas, but struggling in others.

On average, West Virginia residents need to work until April 10 before earning enough money to pay all of their state, local and federal taxes. This ranking, which is heavily reliant on the federal tax code, lands the state 19th in the nation, finishing earlier than the average date for an American, which is April 10.

The state finished well in this category, but thats in part caused by the progressive nature of the federal tax code. Janelle Cammenga, a policy analyst for the Tax Foundation, told The Center Square there are many areas in which the state can change its policies to make it more competitive with other states.

While there is not a lot states can do about the federal portion of this burden, they can still strive to be as competitive as possible in the areas they can control, Cammenga said. West Virginia sees higher individual and corporate income tax rates than most of its neighboring states and could become more competitive by addressing this difference.

According to the report, the state business tax burden fell just inside the top half. It ranked 22 in the country; a lower number signifies a lesser burden on businesses and a higher number signifies a higher burden. Its property tax was the 10th best in the nation, its corporate tax and sales tax fell just inside the top 20. However, its individual income tax and unemployment tax fell outside of the top half.

State tax collections per capita fell just inside the top half, signifying a lower than average collection compared to other states. However, when state taxes are combined with local taxes, West Virginia ranked 34, which signifies a higher than average tax burden.

West Virginia's tax burden is ranked better than half of our states, but there is still significant room for improvement, Jessica Dobrinsky, a policy development associate for the free-market Cardinal Institute for West Virginia Policy, told The Center Square.

A priority to reform our tax structure should be to eliminate the personal income tax in West Virginia, Dobrinsky said. According to OECD data, the income tax is a highly volatile revenue source that can create significant challenges when forecasting fiscal budgets, continuously shown to be an unreliable form of taxation for state growth. Economic data continually reveals that states with no income tax experience faster wage and population growth, precisely what West Virginia needs to become a national economy competitor.

Lawmakers in the state are currently considering legislation that would eliminate most of the states income tax, but raise the sales tax and other taxes to pay for it. The legislation would also require the state to cut spending and would reduce the overall tax burden on residents. The legislation has support from Gov. Jim Justice.

Go here to read the rest:

Report: West Virginia gets mixed rating on tax freedom - The Center Square