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The past year has been a marked improvement for taxpaying West Virginians when it comes to their overall tax burden. The state's personal income tax dropped from 6.5% to 5.1%, and if you pay your personal property taxes on your vehicles correctly, you'll qualify for a full refund of what you paid in 2024 during tax season next year. All in all, it's been a good start to much-needed reform of the state's tax code.
But we must move quicker, with the goal being the total elimination of the state's income tax.
Consider those of us living in the Northern Panhandle, in an area such as Morgantown or along the Ohio River from Parkersburg to Huntington. We're paying a top rate of 5.1% on our income. In Pennsylvania, the state tax on income is 3.07%, while Ohio's current top rate is 3.75% -- and that will drop to 3.5% next year.
Here's a truth -- people decide where to live based on how much they will pay in taxes -- particularly higher income earners. Companies decide where to locate depending on where they can find an eligible work force, and where that work force will be happiest.
In our region, what that means is that a company such as Form Energy can locate in Weirton and bring up to 750 jobs to the state -- but just where will those workers live? It's inevitable that many will locate in Ohio or Pennsylvania. That doesn't do our state any good when it comes to growing our population -- a real issue moving forward.
Additional tax relief will be coming next year, and Gov. Jim Justice last week proposed a further cut in the state income tax on top of that amount. All told, these new cuts could lead to a top income tax rate of about 4.5%.
As noted earlier, that's good -- but it's not good enough. To be competitive, West Virginia leaders must work quickly to eliminate the personal income tax. Even with the proposed changes outlined last week, West Virginia will remain higher than Pennsylvania and Ohio. If we want a truly dynamic economic future, then we must take the step Florida, Tennessee and others have taken and truly give high-level professionals a reason to move here. That will help West Virginia to grow and also help to bring new ideas to our state and our communities. No one is going to move to West Virginia simply because we have only slightly higher taxes than Ohio or Pennsylvania.
It's time to stop dancing around the issue of trying simply to be on par with our neighboring states and make a move that will allow West Virginia to stand out from the pack. Lawmakers must start discussions now on eliminating the state income tax. It's a move that makes sense.