Evidence Counts: A Marriage Not Made in Heaven: A State EITC Without an Income Tax

Last Friday, the Senate Select Committee on Tax Reform explored the idea of amending SB 335 to include a version of a refundable state Earned Income Tax Credit. As noted previously, SB 335 would replace the personal and corporate income tax, along with the sales and use tax, with a general consumption tax of 8 percent. One major problem with this idea is that if West Virginia ceases to have an income tax , how could it create an WV EITC that is based on someones state income tax liability (see here for how a WV EITC would work)? How big would a WV EITC have to be to offset the increased tax liabilities for low-income West Virginians if SB 335 is enacted?

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