A debate is unfolding regarding proposed income tax cuts in West Virginia, with arguments centering on lessons learned from past tax reforms in Kansas. Jonathan Williams, President & Chief Economist of the American Legislative Exchange Council (ALEC), recently wrote an op-ed in the Charleston Gazette-Mail arguing that cutting West Virginia’s income taxes could stimulate economic growth and increase the state’s competitiveness.
Kansas Tax Reforms Under Scrutiny
An editorial published by the Charleston Gazette-Mail on February 3rd raised concerns about the potential for similar outcomes in West Virginia, citing the Kansas tax reforms of 2012 and 2013 as a cautionary tale. The editorial claimed these reforms, based on model policy from ALEC, led to a budget crisis and economic difficulties in Kansas.
However, Williams argues that the Kansas experience has been misinterpreted. He contends that the initial 2012 Kansas tax reform plan included provisions to reduce spending growth and offset revenue losses, but these measures were later removed during the political process. The tax cuts were then enacted without corresponding spending reductions, leading to an unsustainable financial situation.
The Role of Restraint
According to Williams, the key takeaway from Kansas is not that tax cuts are inherently flawed, but that they must be accompanied by “commonsense restraint” in government spending. ALEC’s research, spanning 18 years through the Rich States, Poor States index, suggests that states reducing tax rates and adopting pro-growth policies tend to become more competitive and attract residents.
The argument suggests that Gov. Patrick Morrisey’s income tax cut proposals could potentially stimulate economic growth, but their ultimate impact may depend on whether they are paired with measures to control spending.
Frequently Asked Questions
What did Jonathan Williams argue in his op-ed?
Jonathan Williams argued that cutting West Virginia’s income taxes would stimulate economic growth, reward work, and build the state more competitive with its neighboring states.
What concerns were raised about the Kansas tax reforms?
Concerns were raised that the Kansas tax reforms of 2012 and 2013, based on ALEC model policy, led to a budget crisis and economic malaise in Kansas.
What does ALEC suggest is the lesson from Kansas?
ALEC suggests the lesson from Kansas is not that tax cuts are doomed to fail, but that politicians must have the courage to match tax policy with commonsense restraint.
How might the success of proposed tax cuts in West Virginia depend on future actions?
