Background Image for Header: West Virginia scenery
Discussion and Conclusion
9. Discussion and Conclusion
Tax reform alone will certainly not cure all of the state’s maladies. However, West Virginia’s outlier status on TPP tax has been cited for decades as an issue to address. Difficulty forecasting declining revenue, inconclusive studies regarding impact and amorphous considerations like the perception of a state’s business climate present challenges in crafting optimal tax policy. If West Virginia decides to address this tax, the considerations and options in this document may provide a useful framework for crafting solutions.
Decision-makers may consider revisiting the way West Virginia taxes TPP for two reasons:
- as a result of shifts in modernization and the Fourth Industrial Revolution, sectors and industries are changing and evolving rapidly, so it is important to make sure that the state has a tax system that is attractive, competitive and most conducive to business growth and expansion; and
- TPP tax collections in West Virginia have declined in recent years, so it is challenging to understand what individuals, businesses, schools and local governments may lose or gain from a potential reform, repeal or by maintaining the current tax system.
Admittedly, it is difficult to accurately forecast how much West Virginia would gain from reforming or repealing TPP taxes and how much revenue local governments would be able to raise by retaining the current system.
TPP tax reform has been a priority issue at the Legislature and policy discussions for the past 20 years. As previously mentioned, one of the main challenges is to find a balanced solution that takes into consideration the many competing and often conflicting interests of individuals, businesses and local governments and the realities of the state’s economy, revenue and education funding requirements. This document offers some strategies the state may adopt when considering TPP tax reform, including potential sources of replacement revenue. West Virginia can learn from examples from other states but needs to understand what is right for the state given its particularities. If revenue concerns could be alleviated, reform or repeal of TPP taxes might provide West Virginia with a competitive edge.
Be part of something bigger.
We want to hear from you. Share your ideas. Stay informed. Help us move West Virginia Forward.