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Tax burden heaviest in W.Va.’s prosperous areas, study shows

By JIM ROSS

The State Journal

CHARLESTON, W.Va.  — The tax burden facing West Virginia families varies by geography and income, with more prosperous areas showing a greater burden than struggling ones, a new study shows.

The study by SmartAsset, an online site devoted to improving financial literacy, shows that the tax burden for a family earning the median national income is lowest in McDowell and Wyoming counties and highest in Jefferson, Berkeley and Morgan counties.

“That can sort of make sense,” said A.J. Smith, vice president of financial education for SmartAsset. “If you have houses of higher value, your property taxes are going to be more. If you have more income, your sales taxes are probably going to be higher.”

After McDowell and Wyoming, the counties with the lowest tax burdens were Webster, Clay and Calhoun.

By using the same income levels, the income tax and sales tax burdens are equal across the 55 counties in the SmartAsset calculations. The difference comes in fuel taxes and property taxes. The fuel tax burden in McDowell County is $235 per year, but it’s $472 in Jefferson County. Property taxes are $216 in McDowell County and $1,364 in Jefferson County, according to the study.

Ted Boettner, executive director of the West Virginia Center on Budget and Policy, said tax levels or tax burdens have little to do with business growth in West Virginia.

Ted Boettner, executive director of the West Virginia Center on Budget & Policy

When it comes to choosing a site for a business, taxes are usually far down on the list of things companies consider, Boettner said. Availability of labor, cost of labor, capital costs and quality of life usually rank higher than taxes, he said.

“Usually state and local taxes are 2 percent of the cost of doing business,” Boettner said.

When the Legislature reduced business taxes several years ago, it saved businesses about $200 million, Boettner said. Divided among the number of businesses in the state, the average savings was less than the cost of paying one employee, he said.

That’s for most businesses, he said. If a large company is interested in locating a factory or a corporate headquarters in West Virginia, “we’re going to roll out the red carpet and they’re not going to pay anything,” he said.

“We have economic growth, but we don’t have development. We want to bring those two closer together,” he said.

Smith said SmartAssets is a financial technology company that seeks to help people with making major financial decisions, such as buying a house or saving for retirement.

“We do studies like this to get people thinking and talking about financial topics,” she said.

The company looked at tax burdens and other financial matters holistically. For example, when some people buy their first homes, they look at the payment for the house itself and overlook the taxes that must be paid, she said.

“What kind of tax burden are they comfortable with,” she asked. “It’s a good thing to talk about. It’s a good thing to see where the numbers are.”

Boettner said taxes are one of many things to consider when moving to a new state, including the cost of moving.

“There are all kinds of things that come into play when people decide where to live,” he said.

Staff Writer Jim Ross can be reached at 304-395-3483 or email at [email protected]

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