Wise, Underwood and Giardina have all said they'd like to get rid of
the 6 percent food tax as well. Underwood says he'll replace it
with a general excise tax. Wise says he'd like to cut the food
tax, but can't because of the financial hole such a move would
leave in the state's budget.
"When we get to the point where we can cut taxes, the food tax
ought to be the first one we cut," he said. "But I can't look people in
the eye and say I'm going to cut this tax next year, because we're
just not in a position to do it."
Underwood's "Fair Taxation" plan would also exempt families below the
federal poverty level from paying any income tax.
He wants to offer tax relief to West Virginia residents in other
ways, including repealing the personal property tax on every car
and truck in the state. The tax may be the most unpopular in the
pander to voters.
"For the working poor to get up and go to work, they have to have a
car," Robin Capehart, Underwood's former tax commissioner and the
chairman of his Fair Taxation Commission, said when the proposal was
unveiled. "Having a tax on that car is extremely regressive."
Wise suggested tying residents' personal property tax to their
income, so if their property took a sudden jump in value, they wouldn't be
left with a huge tax bill they couldn't pay.
Eliminating the personal property tax, as Underwood wants to do,
would also mean that businesses wouldn't pay taxes on their equipment,
machinery and inventory. Wise said that's not very fair taxation.
"It seems to shift some of the taxburden from
traditional industry to the kind of businesses we should be trying to
develop, particularly high-technology businesses," he said. "I don't think
taking a significant burden off the coal industry and putting it
This year, the Legislature approved a bill that would have required
business owners to prove they had paid their property taxes before they
could renew their business licenses, in much the same way that drivers
have to produce their property tax receipt to register their car
each year. The West Virginia Association of Counties says that nearly
4,000 businesses in 21 counties owe $3.5 million in back property taxes.
Underwood vetoed the bill, saying the proposal would be hard to manage.
Also, the state Chamber of Commerce said the bill was anti-business.
Both Wise and Underwood have room in their economic plans for small
businesses. Underwood's plan calls for businesses that bring in less than
$100,000 a year to be exempt from his proposed single business tax.
Wise suggests allowing small businesses to avoid paying taxes for their
first two years. "They're not going to pay much anyhow for the first
couple of years," he said.
It's questionable whether Underwood's tax plan will ever gain
enough support from the Legislature to get off the ground. Last year, the
governor wanted to call a special session to enact his tax changes,
but that never happened.
This year, legislators agreed to send out 10,000 alternative tax
returns to state businesses, to see how they would fare under Underwood's
proposed tax reform. "It's a step in the right direction,"
Underwood said during this year's session.
To contact staff writer Greg Moore, use e-mail or call 348-1211.