As West Virginians, we recognize the obstacles we need to overcome to achieve greater economic prosperity.
We talk about it, mull it over, debate it, but not often enough do we decide and act.
Economists, policy makers and business leaders know that the property tax on business inventory, machinery and equipment is a significant impediment to economic growth in West Virginia.
Wonder why West Virginia ranks 43rd for capital intensive manufacturing and 47th for labor intensive manufacturing compared to all states? It’s due in large part to this tax.
This tax places us at a competitive disadvantage. Our surrounding states don’t impose it.
We are a higher cost state for manufacturing. And, as we all know, cost is a key consideration that companies weigh when making location decisions. Existing companies that pay the tax miss out on an opportunity to reinvest in their operations or workforce.
Now is the time to pass the “Just Cut Taxes And Win” amendment proposed by Gov. Jim Justice and state legislative leaders.
This legislation will phase out the tax on business inventory, machinery and equipment over seven years, while replacing the tax revenue that goes to our counties to fund critical public services and schools.
Manufacturers from across the state, including my members, directly employ nearly 7 percent of the state’s workforce.
When you add indirect employment to the equation, manufacturing supports nearly 30 percent of the state’s workforce. And, when a manufacturing job is created, three more jobs are added in the economy.
West Virginia Manufacturing Association members report that they will utilize the savings resulting from the phaseout of this tax to invest in new equipment and technology, and to hire new workers.
This initiative will help manufacturers in every part of the state, from small tool makers and craft brewers to large automotive and chemical manufacturers.
West Virginia faces many economic challenges. This amendment is an opportunity to grow and diversify our economy and provide long-term solutions and a stronger fiscal base for addressing these challenges.
We know the problem. We’ve identified a solution. Now is the time for action. Let’s pass the “Just Cut Taxes And Win” amendment.
EDITOR'S NOTE: McPhail is president of the West Virginia Manufacturers Association. This letter also appeared in the Charleston Gazette-Mail.