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Editorial: States with income taxes are more prosperous

From The Charleston Gazette-Mail:

Traditionally, conservatives try to shift the tax burden off the wealthy onto less-prosperous families. It’s called “reverse Robin Hood,” taking from the poor to give to the rich.

The Legislature’s current proposal to replace West Virginia’s personal income tax with higher sales taxes would serve that purpose. Progressive income taxes take most from high incomes — from those best able to pay — while sales taxes take a lot from little folks.

Ted Boettner, of the nonprofit Center on Budget & Policy, says this isn’t the sort of “tax reform” West Virginia needs. He added:

“We have a growing issue of income inequality all over the country and in West Virginia, too. This would just exacerbate that problem.”

The personal income tax supplies $200 million yearly, 45 percent of revenue going into the state’s general fund. It would be a shame to shift that load more heavily onto moderate-income people.

Some conservative legislators argue that states without a personal income tax enjoy better economic growth, because affluent business owners want to live where they avoid taxation.

However, Boettner offered national figures disputing that claim. From 2005 to 2015, the nine states with highest income tax reaped 5.6 percent GDP growth — while nine states with no income tax grew only 3.2 percent.

West Virginia is in crisis, facing a $500 million budget shortage in the coming fiscal year and $700 million the year thereafter. All three major bond rating services have downgraded the state’s credit rating. Enormous new revenue is needed.

That revenue shouldn’t be drained unfairly from less-privileged families, who are less able to pay.

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