The House Finance Committee has taken a step towards approving the proposal of Governor Jim Justice to eliminate state income tax on social security benefits for central and high income waste virginians.
However, law manufacturers are taking more cautious approaches for tax deduction. The bill coming out of the committee will phase the tax in three years, rather than finishing it at once and thus deduct an estimated $ 37 million from the state’s revenue.
Committee Chairman Vernon Chris (R, Wood). “” It is our custom, as well as our prudent, that we usually cut tax. “
Quite appropriate.
The state has already reduced the state income tax marginal rates by 21.25 percent, and the rates will be further phased out when they get some revenue benchmarks. It is a boon for taxpayers, but it also represents the state’s revenue by an estimated $ 750 million. The state is now running the surplus, but those conditions can be shifted rapidly. The remaining social security recipients are a phased manner in the eradication of tax.
The big issue is that West Virginia should get rid of tax. West Virginia is only one of the only 12 states that still levies on social security benefits.* And the state has already phased out tax on single filers that reduce under $ 50,000 per year and joint filers under $ 100,000.
The justice administration estimates that at least 50,000 senior families will benefit from the state income tax except social security benefits at all income levels.
Opponents will argue that they are senior well closed and do not require money, but this is not the case. Employees contributed 6.2 percent of each salary to social security during their work years, and it is included in the total amount of taxable income. Therefore, when a person retires, the West Virginia is again levying the income.
In addition, regardless of what the states do, the federal government still takes its share. Since 1984, social security benefits have been subject to federal income taxes. Early gains up to 85 percent can be subject to federal taxes for high income people.
It is unlikely that the federal government will ever get rid of its income tax on social security as Washington always needs more money. The Congress budget office estimates that the lack of this year will be $ 1.5 trillion. But West Virginis have no effect on that way or any other to impose tax on their benefits.
Eliminating state income tax on social security benefits for medium and high -income individuals, another step towards making the mountain state a more attractive rehabilitation destination, as well as encouraging the demographic to stay in retirement here where they can keep their own money more.