How We Talk About Economic Growth
In the last few years of the Obama administration, The Wall Street Journal relentlessly criticized the administration’s failure to achieve sufficient economic growth. That newspaper complained that Obama’s over-regulated economy was to blame for a GDP growth rate of 2.1% -- tepid compared to recoveries in the past. The Journal is, of course, the voice of business people who often favor the conservative agenda of low taxes and lower regulation. But the Journal was on to something. The need for economic growth is hugely important and one thing both conservative business people and progressives should be able to agree on.
Replacing West Virginia’s Income Tax with a Consumption Tax Promises Huge New Deficits for the Future
West Virginia Senate Bill 335, now pending before the Senate Select Committee on Tax Reform, would phase out West Virginia’s income tax and impose an 8% consumption tax on a broad range of transactions. The legislative “findings” that precede SB 335 assert that a major change like this to our tax structure would be both fair and fiscally sound. As to fairness, this assertion is demonstrably false. SB 355 would increase the tax burden on low income and working class taxpayers and give wealthier taxpayers a substantial overall tax break.
In the face of at least a $500 million budget deficit this fiscal year and perhaps a larger one next fiscal year, West Virginia is in dire need of a tax plan that will grow long-term, stable revenues. Unfortunately, SB 335 would at best provide only temporary revenue relief and portends mounting future budget deficits. This revolutionary change to our tax structure would be bad law and worse policy.
Eliminating the Income Tax and Creating a New Consumption Tax: Bad Law and Worse Policy
Mischief is well on its way to becoming law in West Virginia. The Republican-controlled Senate Select Committee on Tax Reform is about to propose to the full Senate the passage of SB 335, which would phase out the state income tax and transform the current 6% sales tax into a broader 8% consumption tax. The conceptual basis for the proposed law is that the state provides the marketplace in which sales can take place so that vendors and purchasers who engage in transactions should be required to pay for the privilege of using that marketplace. If that silliness weren’t enough, the Bill’s legislative findings provide the following gem of a non sequitur. “The Legislature further finds that, in the free market system, the best judge of a purchaser’s ability to pay, for the purchase of the goods and services, is the purchaser, and, thus a broad-based consumption tax is firmly based on that principle of sound and fair taxation.” There is nothing sound or fair about this revolutionary change in West Virginia’s tax structure and it should be stopped in its tracks.
Republican Senators Propose Replacing West Virginia’s Income Tax with A Higher New Sales Tax
Only nine states in the nation have no state income tax. However, there is considerable support in the West Virginia Senate to phase out our income tax completely by 2021 and replace lost revenue by raising the state’s sales tax to 8% from 6% and eliminating many sales tax exemptions. The effort in the Senate is being led by Sen. Robert Karnes (R-Upshur, 11) sponsor of SB 335. If the Bill in its present form is enacted, West Virginians would soon begin paying sales taxes on new items such as groceries, internet streaming services, haircuts, professional services, and more. The Bill is co-sponsored by eighteen other Republican Senators, including Panhandle Senators Craig Blair (R-Berkeley, 15) and Charles Trump (R-Morgan, 15).
Rep. Alex Mooney Deals a Blow to West Virginia’s Mountain Streams
Rep. Alex Mooney (WV 2nd) is celebrating the demise of the Interior Department's Stream Protection Rule. This Rule, made effective in the waning days of President Obama’s tenure, would have created a buffer zone between mountain streams and mine sites and would have protected drinking water in accordance with modern technology. The Rule would have mainly affected mining done by mountaintop removal where mining refuse is pushed into stream valleys. But Rep. Mooney and his Big Coal backers claim that the Rule would have killed over 70,000 jobs in the coal industry. Unfortunately, Rep. Mooney’s grasp of coal economics and employment numbers is feeble, perhaps influenced by his ideological impulse to dance on the grave of the Obama Administration.
Those Who Work, Those Who Don’t
After the 2016 election results we are struggling to understand what hit us. One common view is that Democrats have become tone deaf to the working class, advancing policies that cater to other key constituencies of the party but failing to do much about bettering the economic lives of those in the middle and lower middle. Why, we ask, did Wisconsin, Michigan and Pennsylvania forsake Hillary Clinton in favor of a bombastic outsider who made huge promises, but apparently hasn’t a clue how to govern to deliver on them?
Several thoughtful books can help us find the answer. The best of these is Those Who Work, Those Who Don’t, a sociological study written by Jennifer Sherman in 2009. Sherman sought out a small town in rural America where industry and jobs had been decimated and widespread poverty made the normal social pecking order collapse. This should sound familiar in West Virginia. She wanted to learn what factors provided status and capital in a community where economic distinctions were no longer possible. What she learned is an eye-opener.
How We Talk About Economic Growth
In the last few years of the Obama administration, The Wall Street Journal relentlessly criticized the administration’s failure to achieve sufficient economic growth. That newspaper complained that Obama’s over-regulated economy was to blame for a GDP growth rate of 2.1% -- tepid compared to recoveries in the past. The Journal is, of course, the voice of business people who often favor the conservative agenda of low taxes and lower regulation. But the Journal was on to something. The need for economic growth is hugely important and one thing both conservative business people and progressives should be able to agree on.
Replacing West Virginia’s Income Tax with a Consumption Tax Promises Huge New Deficits for the Future
West Virginia Senate Bill 335, now pending before the Senate Select Committee on Tax Reform, would phase out West Virginia’s income tax and impose an 8% consumption tax on a broad range of transactions. The legislative “findings” that precede SB 335 assert that a major change like this to our tax structure would be both fair and fiscally sound. As to fairness, this assertion is demonstrably false. SB 355 would increase the tax burden on low income and working class taxpayers and give wealthier taxpayers a substantial overall tax break.
In the face of at least a $500 million budget deficit this fiscal year and perhaps a larger one next fiscal year, West Virginia is in dire need of a tax plan that will grow long-term, stable revenues. Unfortunately, SB 335 would at best provide only temporary revenue relief and portends mounting future budget deficits. This revolutionary change to our tax structure would be bad law and worse policy.
Eliminating the Income Tax and Creating a New Consumption Tax: Bad Law and Worse Policy
Mischief is well on its way to becoming law in West Virginia. The Republican-controlled Senate Select Committee on Tax Reform is about to propose to the full Senate the passage of SB 335, which would phase out the state income tax and transform the current 6% sales tax into a broader 8% consumption tax. The conceptual basis for the proposed law is that the state provides the marketplace in which sales can take place so that vendors and purchasers who engage in transactions should be required to pay for the privilege of using that marketplace. If that silliness weren’t enough, the Bill’s legislative findings provide the following gem of a non sequitur. “The Legislature further finds that, in the free market system, the best judge of a purchaser’s ability to pay, for the purchase of the goods and services, is the purchaser, and, thus a broad-based consumption tax is firmly based on that principle of sound and fair taxation.” There is nothing sound or fair about this revolutionary change in West Virginia’s tax structure and it should be stopped in its tracks.
Republican Senators Propose Replacing West Virginia’s Income Tax with A Higher New Sales Tax
Only nine states in the nation have no state income tax. However, there is considerable support in the West Virginia Senate to phase out our income tax completely by 2021 and replace lost revenue by raising the state’s sales tax to 8% from 6% and eliminating many sales tax exemptions. The effort in the Senate is being led by Sen. Robert Karnes (R-Upshur, 11) sponsor of SB 335. If the Bill in its present form is enacted, West Virginians would soon begin paying sales taxes on new items such as groceries, internet streaming services, haircuts, professional services, and more. The Bill is co-sponsored by eighteen other Republican Senators, including Panhandle Senators Craig Blair (R-Berkeley, 15) and Charles Trump (R-Morgan, 15).
Rep. Alex Mooney Deals a Blow to West Virginia’s Mountain Streams
Rep. Alex Mooney (WV 2nd) is celebrating the demise of the Interior Department's Stream Protection Rule. This Rule, made effective in the waning days of President Obama’s tenure, would have created a buffer zone between mountain streams and mine sites and would have protected drinking water in accordance with modern technology. The Rule would have mainly affected mining done by mountaintop removal where mining refuse is pushed into stream valleys. But Rep. Mooney and his Big Coal backers claim that the Rule would have killed over 70,000 jobs in the coal industry. Unfortunately, Rep. Mooney’s grasp of coal economics and employment numbers is feeble, perhaps influenced by his ideological impulse to dance on the grave of the Obama Administration.
Those Who Work, Those Who Don’t
After the 2016 election results we are struggling to understand what hit us. One common view is that Democrats have become tone deaf to the working class, advancing policies that cater to other key constituencies of the party but failing to do much about bettering the economic lives of those in the middle and lower middle. Why, we ask, did Wisconsin, Michigan and Pennsylvania forsake Hillary Clinton in favor of a bombastic outsider who made huge promises, but apparently hasn’t a clue how to govern to deliver on them?
Several thoughtful books can help us find the answer. The best of these is Those Who Work, Those Who Don’t, a sociological study written by Jennifer Sherman in 2009. Sherman sought out a small town in rural America where industry and jobs had been decimated and widespread poverty made the normal social pecking order collapse. This should sound familiar in West Virginia. She wanted to learn what factors provided status and capital in a community where economic distinctions were no longer possible. What she learned is an eye-opener.