EXCLUSIVE: West Virginia Gov. Jim Justice is making the case for his proposal to repeal the personal income tax, telling FOX Business it is “an opportunity beyond belief” to transform the state and make all West Virginians “cash positive.”
Justice, in an exclusive interview with FOX Business, said the state has “poised itself from an economic standpoint and opportunity standpoint to go right to the elimination of our personal income tax.”
“We are ready,” Justice told FOX Business. “We’ve got a strong economy, the state is right side up, and with this, it will take us to another level beyond belief.”
Justice, earlier this month, first laid out his proposal to reduce the state income tax by 60% for the first year, leading to an eventual repeal of the tax in approximately three years.
“We embarked on this, saying, how do we make everybody cash positive — even the people that don’t pay income taxes,” Justice explained. “So we came up with $52 million in cash rebates to those people, so they can pay a little more in consumer sales tax ... and still end up with money in their pocket.”
To pay for the repeal in income tax, the state consumer sales tax would be increased from 6.0% to 7.9%, while adding a small, single-item luxury tax for certain high-value luxury items that cost $5,000 or more.
The proposal would have professional services, such as legal and accounting services, pay the same tax rate as skilled trades like plumbers and electricians.
The consumer sales tax base would be expanded to include computer hardware and software, legal services, accounting services, other professional services, selected advertising, electronic data processing, and health and fitness memberships.
Justice said those professional services could also see an increase in business as people on the outside of the state begin to migrate to West Virginia.
Also, for the first time since 1951, the tax on soft drinks would be changed. Additionally, taxes on tobacco products, beer, wine and liquor will also be changed.
Justice’s plan also calls for a tiering system to be put in place for natural gas, oil and coal severance taxes so that when times are good, these companies throw a little more in the collection plate, and when times are bad, the state steps up and lowers severance tax so that their critical jobs are protected.
But Justice says the plan would benefit all West Virginians. Under the plan, lower income West Virginians making less than $35,000 annually, would receive a tax rebate check, whereas low-income and high-income taxpayers would also see a net positive benefit.
According to the governor's office, the median household income in West Virginia is $46,711, which means most families would take home $500 to $799 more annually under the plan. Families earning $70,000 to $80,000 per year would gain $1,159 to $1,476 annually from the income tax cut.
“If you are working for someone, we’re going to leave your checks the same,” Justice explained. “But we’re going to send you checks every two months, or every quarter."
Justice said this strategy would help to boost and stimulate West Virginia’s economy.
“When you get that extra $400 or so every few months, there is a big, big, big chance you’re going to spend it,” he said. “I believe it is the psyche that is there in all of our lives.”
“All of a sudden, you get an extra $20 in your paycheck, you don’t even realize it happens,” he said. “But at the same time, if you get a check for $300, $400 every quarter, it is something you can look forward to. It is what we do as humans.”
Justice said that if the proposal is passed into law, by year three, those checks would nearly double.
But Justice was cautiously optimistic when asked whether a plan like this would be accepted by the largely Republican state legislature.
“That’s the problem. We have a lot of legislators that are far right, and any kind of level of change for anyone is tough,” he said. “When I say I am going to have to raise the bubble gum tax, what it always comes down to is, ‘I’m not voting for any tax increase.’”
He added: “So it is an education process.”
Justice said that “a little bit of the increase in some taxes” would help the state, while allowing the consumer to stay “significantly cash positive.”
“The state is going to be rock solid as far as state health, and as for individual health, we have made it so that they stay cash positive.”
Justice, though, said if passed, the plan would “light up small businesses like crazy.”
“Some people are just going to be sticks in the mud, and you can’t move them,” he said. “I’m not the king, but I am going to give it everything I’ve got, and if it doesn’t get through, shame on them, not on me.”
He added: “Because it is an opportunity beyond belief.”
While the U.S. population has doubled over the past 70 years, West Virginia is the only state to watch its population steadily decline. Given this trend, West Virginia is set to lose a seat in the U.S. House of Representatives – setting back the interests and representation of West Virginians at the decision-making table.
Justice said the plan could help to attract people to move to the state, while touting West Virginians as "such good people who love, and appreciate others beyond belief."
“They are craftsmen, faith-based, low-crime, they know the difference between right and wrong,” he said. “We don’t have the problems here that are all across our country in so many different places. We are a welcoming, loving people.”
Justice said the state has “real job opportunity,” and encouraged people to “look” to come to the state.
“I don’t mean that as a sales job from a governor’s standpoint—I mean that from my heart,” Justice said. “So really, I’m a business guy - I’m not a politician. I don’t want to be a politician ever.”
He added: “I’ll make mistakes, but I will never tell you something I knowingly know is not the truth no way. Not me.”
“I’m not going to be the typical politician,” he said. “I’m not going to do that.”
Justice has been governor of West Virginia since 2017.