By Paul B. Weiss, February 22, 2017
Mike Caryl’s proposed tax reform bill, eliminating the state income tax and increasing the sales and use tax (Attorney proposes income tax elimination, Journal Feb. 21) is nothing more than an insidious and cynical effort to shift the state government tax burden from those who can best bear it onto the shoulders of the poor and middle class who can least bear it. For purposes of illustration, let us compare and contrast three hypothetical individual taxpayers. “Taxpayer A” earns $100,000 per year after federal taxes, $20,000 of which goes into savings for retirement. “Taxpayer B” nets $40,000 per year, of which $5,000 goes into savings. “Taxpayer C” lives at the poverty level with net income of $11,880 per year and has no savings.
Assuming these figures also represent their West Virginia taxable income, their income tax liabilities at present would be $5,373, $1,574 and $374, respectively. Assuming that the income not put into savings is spent and subject to sales and use tax, they would pay an additional $4,800, $2,100 and $713, for a total tax burden of $10,173, $3,674, $1,087. (For purposes of simplicity, a flat 6 percent sales tax rate is used. The actual burdens would be somewhat lower on account of the reduced sales tax rate for food items).