For Immediate Release
Contact: Caitlin Cook
- A 50-state analysis of the House tax plan released last week reveals that in West Virginia the wealthiest 1 percent of West Virginians will receive the greatest share of the total tax cut in year one and their share would grow through 2027. Further, the value of the tax cut would decline over time for every income group in West Virginia except the very richest.
House leadership continues to tout this tax proposal, which will increase the federal deficit by $1.5 trillion over the next decade, as a plan to boost the middle class. But a closer examination of the bill's provisions reveals that it is laser-focused on tax cuts for the nation's highest earning households.
The wealthiest West Virginian's share of West Virginia's tax cuts would grow over time due to phase-ins of tax cuts that mostly benefit the rich and the eventual elimination or erosion in value of provisions that benefit low- and middle-income taxpayers. For example, after five years, the bill eliminates a $300 non-child dependent credit that benefits low- and middle-income families while fully repealing the estate tax in year six for the very large estate subject to the tax.
More specifically, the 10-year outlook for the plan reveals that by 2027, the top 1 percent of households in West Virginia share of tax cut would increase from 19 percent in year one to 29 percent by 2027, for an average cut of $21,090. Middle-income taxpayers' average tax cut would erode to $240 in 2027 from $450 in 2018, and the poorest 20 percent's average tax cut would decline from $80 in 2018 to $60 in 2027.
"Similar to previous plans, the House GOP tax plan primarily benefits the rich. While some low- and middle-income households in West Virginia may receive a small tax cut, the plan also raises taxes on some of these families and many may see no benefit at all," said Ted Boettner, West Virginia Center on Budget and Policy Executive Director. "Instead of simplifying the tax code and focusing on tax cuts for working families, this plan will likely come at the expense of low- and middle-income families who will likely lose more from cuts to education, health care, infrastructure or other public services than they gain from the small tax cuts they would receive."
Following are some highlights of how the plan affects West Virginia:
- The share of low- and middle-income West Virginians seeing a tax hike under the House proposal increases between 2018 and 2027.
- 10 percent of taxpayers in West Virginia receive a tax hike in 2027.
- West Virginia's top 1 percent gets about 1/3 of the tax cuts in 2027.
- As a share of income, the top 1 percent's tax cut is 6.5 times larger than the middle-class' tax cut in West Virginia by 2027
The West Virginia Center on Budget and Policy is a public policy research organization that is nonpartisan, nonprofit, and statewide. The Center focuses on how policy decisions affect all West Virginians, especially low- and moderate-income families.