West Virginia Center on Budget and Policy: House Income Tax Plan Benefits Wealthy and Could Punch Large Holes in State BudgetITEP Work in Action
Once the fund reaches “an amount equal to or exceeding 2.5 times the total net reduction in personal income tax revenue collections that would have been received in that fiscal year if the income tax rates for that fiscal year had been reduced by 0.25 percent” it triggers a reduction in the state’s personal income tax rates for each bracket of 0.25%. The rates would decrease by 0.25% every time the trigger is met. The fiscal note does not estimate the loss of revenue associated with the income tax rate reduction of 0.25% for each bracket or for any further reductions of 0.25% in the tax rates if they triggers are met. According to analysis from the Institute for Taxation and Economic Policy, the revenue loss from a 0.25% reduction in each of the five personal income tax rates (see table below) would be $102 million, a reduction of 0.50% would be $204 million, a reduction of 0.75% would be $306 million, and a reduction of 1% would be $408 million.