Possible tax relief in West Virginia

The following editorial appeared in The Inter-Mountain, Elkins, W.Va., on Dec. 1:

It will be a long, possibly painful, stretch for West Virginia legislators to provide tax relief for anyone next year. Just to keep this year’s budget in balance, Gov. Earl Ray Tomblin has had to order major spending cuts.

But some lawmakers want to enact a break for senior citizens – and that may make sense for several reasons.

A select committee of legislators has been investigating tax reform for several months. Their praiseworthy work has looked at both tax cuts for economic development and simplifying the tax code.

Various good ideas have been suggested. But, again, with a $250 million gap between revenue and spending in this year’s budget, it will be difficult to do much.

One reason the idea of reducing the income tax on senior citizens’ Social Security benefits is good involves momentum. Not providing some relief after the special panel has done so much work could send its ideas to a shelf to gather dust. Providing the break to seniors could keep up the momentum.

But the idea has even more merit from another standpoint. Tax engineering to help the economy often targets businesses directly – and that can leave a bad taste in the mouths of some individual taxpayers.

Almost all tax relief granted to older West Virginians is likely to be pumped back into the economy, simply because so many live on fixed incomes.

Cutting the income tax on Social Security benefits would help both senior citizens and the economy.

It would have one other desirable effect. Many government retirees in the state health insurance program are upset about plans to make it more expensive through steps such as higher co-pays. The most vulnerable to that, senior citizens, would be helped by the tax cut plan.

Details of the proposal – how much of a cut and at what cost to the budget – have not been finalized. Legislators should pursue it as one of the best ways they can employ the very limited fiscal flexibility they have.



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