HOPEFULS LOOK TO SHIFT TAX BURDEN
This is the latest in an ongoing series of articles examining the
issues, records and platforms of West Virginia's candidates for governor.
Today's installment focuses on taxes.
Twenty years ago, a group of volunteers helped complete a landmark
They found, among other things, that large landowners shoulder a
for it, homeowners and families pay more than they should, the study
This year, two of those volunteers from the Appalachian Land Ownership
Task Force are running for governor of West Virginia.
Both Democratic Rep. Bob Wise and third-party candidate Denise Giardina
taxes, although Giardina says it much more often and much more loudly than
Incumbent Gov. Cecil Underwood's "Agenda For Fair Taxation" doesn't
include such a proposal for large landholders, such as coal companies.
Underwood wants to eliminate several current taxes on businesses,
including the corporate income tax and the property tax on
machinery and equipment, and replace them with a single business
tax of 2 percent.
Although the state Tax Department recently reappraised coal
reserves, the total appraised value of the state's coal reserves remained
basically the same. But some counties have seen their coal reserves
devalued, while their property taxes continue to rise.
For example, Kanawha County's coal reserves were appraised at $91
million in 1996, but the value dropped to $55 million in 2000. Over the
by nearly $40,000, from $97,000 to $136,500.
"They [land values] ought to be re-evaluated, just out of fairness,"
Wise said last week. "We've gone through a couple of reappraisals, but
there's still a lot of work that needs to be done. We can do that with an
aggressive Tax Department."
Wise, a longtime congressman, hasn't made property taxes a main theme
in his campaign, though. Giardina, of the newly formed Mountain Party,
"Despite subsequent reappraisals, this situation has hardly improved,"
been challenged on numerous occasions to come up with fair appraisals, but
every administration, Democratic and Republican, has refused to make
absentee owners pay their fair share of property tax."
She also favors an "excess acreage" tax on landowners who
control more than 10,000 acres in West Virginia.
Underwood, the Republican candidate, did not return a phone call
Smart, a national voter education group, he says he would leave taxes on
mineral reserves the way they are.
Another gubernatorial candidate, Libertarian Bob Myers, would do away
with any tax on coal reserves and property, according to the survey
he filled out for Project Vote Smart.
That's not surprising because Libertarians generally favor hands-off
government in every way possible. If it's a tax, chances are Myers
wants to cut it or get rid of it. He singles out the food tax on
his campaign Web site: "There is nothing desirable about living in a state
that taxes food."
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 tax burden 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.