Budget Beat - December 14, 2012
Time to Embrace 21st Century on Internet Sales Tax
Each year West Virginia loses millions because it does not tax Internet sales. Like most states, West Virginia taxes the in-store sales of physical books, movies, software, and games, but when these products are delivered digitally over the Internet, sales tax does not apply. A new report by the Center on Budget and Policy Priorities helps explain how West Virginia could bring its sales tax policy into the 21st century by making the sales tax fairer, leveling the playing field for all businesses.
Severance Taxes Important to Counties and Local Governments
Coal production down, natural gas production up. What will this mean to local governments that rely on severance taxes for important programs like education? In an issue brief released this week, the WVCBP projected that even with uncertainty in the coal market, severance taxes should still prove to be a reliable and growing source of revenue for counties for years to come. Read more in the State Journal which quoted this week's report.
Legislators Talk About Business Tax Breaks
Do tax payers get their money's worth from tax breaks to businesses? Increased transparency and reporting on this issue would help lawmakers and the public understand if tax give-aways actually create jobs. Responding to a New York Times article ranking West Virginia number 2 in give-aways, legislators heard from West Virginia Commerce Secretary Keith Burdette this week during interims. WVCBP's Sean O'Leary was quoted in the Charleston Daily Mail saying, "The Times may have painted a bad picture, but in West Virginia we haven't painted anything at all," said policy analyst Sean O'Leary. "It's just a blank canvas." Read more in this blog post.
More In the News
This week Ted Boettner was interviewed on WV Public Radio about the impact of the fiscal cliff on low-income West Virginia families.
In his second installment on personal property taxes, Sean O'Leary explained what's at stake for counties if the personal property tax is eliminated. Accounting for nearly 20% of all county revenue, personal property taxes are extremely important to counties so they can fund crucial programs and services. Read blog post.
West Virginia tends to rank at the top or bottom of many lists and one you might not be aware of is the Economic Freedom Index. According to the Frazier Institute, West Virginia ranks poorly in terms of Economic Freedom, a low-tax, small government, job-creating utopia where individual affluence is increased. This week Sean ran the numbers and found that there is no evidence for Economically Free states to have greater economic growth than those less free states. Read blog post.
West Virginia also ranked poorly in the health of its safety net. With its high poverty level, the state needs to spend much more on its people in terms of public programs than it currently does. Not only does West Virginia fall below the national average, it has the fourth-weakest safety net in the country. Not good news for the low-income families that are fighting to stay out of poverty. Read Stuart and Ted's blog post.
In a week of rankings, Forbes put West Virginia near the bottom of its list on the best states in which to do business. But, like the Economic Freedom index, the Forbes ranking is a poor indicator of jobs growth. Read blog post.