The State Senate has approved a bill which will have the effect of West Virginians paying higher sales tax from 2018. On the positive side, rates of income tax have come down. There is a possibility that the latter would be eliminated. Sales tax would be upped from the present six percent to about 7.25 percent. The new bill was approved 18 supporting, 13 opposing by the Republican lawmakers. The GOP is a majority in the chamber.
Abolishment of income tax
The approved new bill will end taxes imposed by the state on social security benefits and military pensions. It has more than a passing resemblance to tax bill which was also passed by the same house. It is believed that there would be no income taxes in the future if there were sufficient revenue growth during the coming years. This point was underscored by Senator Ed Gaunch of the GOP and elected from Charleston. Heb said that the bill constituted a decrease of net tax post full implementation. He added that this bill would hopefully stimulate the economy of West Virginia and end the projected budget deficit of the state this fiscal year beginning in July sans the need of deep funding cuts for social service and education.
The new bill has its share of skeptics. Democratic Senatior Douglas Facemire from Braxon County, said that the increase and decrease of taxes amount to net zero gain for state citizens. It puts the finance of the state at risk and is fiscally irresponsible too.
Amendments and proposals
The new bill is somewhat similar to the bills that the Senate has previously passed with support of Jim Justice, the Democratic governor. However, there exists two sharp differences from the proposal made by the House, which leaves sales tax at about seven percent and broadened to cover the cellphone services. Daryl Cowles, the House Majority Leader, said that the large sales tax increase bothers him.
On May 24, the House gave its vote 85-0 against accepting the amendments made by the Senate. Both the houses later adjourned the special budget session. It will begin again from June 5th. This Senate bill will also increase tax from corporate net income from the present 6.5 percent to about seven percent. Mike Hall, the Chairman of Senate Finance Committee, whose committee advanced this bill and also voted for it, told those interested that he was a little ambivalent about this bill. He admitted that there was the risk of much worse deficits in the budget to stimulate the US economy.