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Considering income tax elimination

First let me say, all taxes are bad because they distort economic activity. This suggests to me that to maximize human happiness, a.k.a. prosperity, governments should remain as small as possible and tax in the least distorting way possible.

Everyone hates paying taxes. So why don’t we all live in one of the nine states without an income tax?

But, of course, no state is perfect. Those states without an income tax still have to pay for roads, schools and public service, so residents still have to pay other taxes to keep the state running. And most often those other taxes can be on the high end. So, if you’re thinking that income tax should be eliminated in West Virginia, continue reading to see some of the other taxes you’ll have to pay. Maybe paying state income tax won’t look so bad.

As governments grow (rightly or not), the quest for the LBT or Least Bad Tax is always in the forefront for lawmakers.

One putative LBT candidate, currently under discussion in Charleston: Additional taxes on sin. Promising more than it can deliver.

Five hundred years ago Martin Luther said that if you are going to sin, sin boldly.

For the sake of our state budget, the governor and lawmakers are quietly hoping that is just what West Virginians will do.

Unlike Santa, our elected officials want at least some residents to be a little “naughty” and continue doing things it considers harmful so it can collect sin taxes on their behavior.

What is a sin tax? Sin taxes are typically added to liquor, cigarettes, sweetened soft drinks and goods that are considered morally hazardous. Because they generate enormous revenue, West Virginia legislators favor sin taxes. Many West Virginians accept sin taxes because they affect only those who use sin-taxed products or engage in sin-taxed behaviors.

In states like West Virginia who are facing a deficit, more sin taxes are generally one of the first taxes recommended by lawmakers to help fill the budget gap.

Just for the record West Virginia is currently number 3 in the nation for sin tax.

The state receives about 11 % of total revenue from sin tax, or about a billion dollars a year.

West Virginia gets more of its total revenue from lottery proceeds than any other state.

The tax reform panacea in West Virginia is once again in vogue. This go-round, it’s income tax.

Today, West Virginia is one of the two least-educated states in the country, in terms of the percentage of its people that have college degrees. We don’t educate nearly as many professionals in all of our programs to support the kind of growth the state needs. We need to attract more people to come here, and whether we have an income tax or not is unlikely to make any difference.

Good Day!

Robert Ware

French Creek

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