The Home Finance chairman says the brand new tax plan has a “wow issue” however there are issues

The House Finance chairman says an income tax proposal that came off the committee this week has a “wow factor”.

"Real money, real dollars, citizens who get tax breaks every year, that's the wow factor," said Eric Householder, chairman of House Finance, R-Berkeley, on MetroNews' Talkline today.

The bill came from House Finance Monday afternoon before it even had a number, sponsorships, or tax certificate. Now called House Bill 3300, it rolls next to the house floor where the Republican super-major appears prepared to endorse it.

A virtual public hearing on the House's budget tax cut plan has been announced for 3 p.m. Thursday. Log in to speak at 304-340-3230 between 1:00 PM and 2:00 PM. Wednesday.

Eric Householder, The State Delegate (R-Berkeley) meets with @HoppyKercheval to discuss the house's tax bill. WATCH:

– MetroNews (@WVMetroNews) March 23, 2021

In addition to the “wow factor”, however, there are complications.

The House of Representatives proposal is a more incremental approach than that proposed by the Governor and describes the gradual elimination of income tax over a 12 year period. It would set up a "personal income tax reduction fund" that would allow tax rates to be reduced if the fund reached a set threshold. The first planned income tax cut is $ 150 million. And from then on, there could be cuts of $ 150 million a year.

The money would have to come from somewhere. In the absence of a tax certificate, it is not known how high these reductions would be. Traditionally, higher education and health care have been the easiest places for the state government to save in difficult times.

"The easy part is how we're going to get rid of income tax," said Delegate Joe Statler, R-Monongalia. "The hard part is how badly we want to get rid of income tax."

Governor Jim Justice

The other big complication is Governor Jim Justice.

The moment House Finance passed its bill, Justice held a roundtable of executives and backed out of criticism.

"West Virgins, you have to listen to me," said the governor. "They have special interests that you want to keep in your place. They want you to know your place and stay in it. All of us here are trying to help you get out of difficult times into prosperity and good times. In the truest sense of the word do you have special interests that bombard the legislature. "

The judiciary is proposing a big blow in income tax – a 60 percent cut in the first year. And the governor provides for the elimination within three years.

An overview of the governor's plan estimates the initial personal income tax cuts of $ 1,035,650,000 and discounts of $ 52 million for lower-income residents – but also tax increases of $ 902,600,000 to offset most of those breaks .

The proposal would also impose a number of other taxes, including on soft drinks, tobacco, beer and wine. And Justice suggests taxing some professional services for the first time, including law firms, accountants, gyms, and more. He also advocates a "luxury tax" on some items that cost more than $ 5,000. And he proposes a tiering of severance taxes on coal, oil and natural gas that pays more when the markets are better.

The possibility of increasing and expanding taxes has raised concern among corporate groups and legislators.

Eric Householder

"I think the governor's plan penalized a lot of small businesses," Householder said today.

The head of household said he met privately with the governor and endorsed the house's proposal. Householder said the plan could cut income taxes by $ 450 million by the end of the governor's term in three years.

"I think it's a better approach than what the governor suggested," he said.

"We're doing something more responsible, moderate, and predictable."

However, there are also questions about the House's proposal.

Kelly Allen

Kelly Allen, executive director of the West Virginia Center on Budget & Policy, said the math is wrong.

"While the tax cuts cost" only "$ 150 million in the first year, they quickly rise to $ 1 billion of our state's $ 4.5 billion budget by year seven," Allen said.

“The plan also redirects existing income that is already financing current budget requirements into a fund that is not intended to compensate for the loss of income, but rather accelerate it. This plan would force budget cuts that could wipe out 20 percent of public services by year seven, well above the savings the average West Virginia household would make. "

She suggested that the bill passed the committee with no tax bill and no discussion of which public services should be cut to pay the first $ 150 million, “probably because of the resulting cuts for both lawmakers and lawyers will be deeply unpopular and uncomfortable for Western Virgins. ”

Ed Evans

Delegate Ed Evans, D-McDowell, said on WJLS radio this morning that he needs to look further into the plan of the house.

"This bill is very different from what the governor sent out," said Evans.

Evans is also not being sold according to the governor's plan.

"It really became a cannonball."