West Virginia Middle of the Road on Tax Policy

Last week, the Cato Institute released a study that gave Governor Earl Ray Tomblin middling marks for fiscal policy.  Yesterday, the State Tax Foundation showed equal enthusiasm for West Virginia's tax regime, giving the state a ranking of 23rd.

The State Business Tax Climate Index shows how competitive tax rates are with other states and how that might impact economic development.  It rates the following taxes on a scale of zero to ten in terms of how the taxes affect a state's competitive advantage.

• Individual Income Tax
• Sales Tax
• Corporate Income Tax
• Property Tax
• Unemployment Insurance Tax

These are compared to other states, not an objective mark.

Each of the components of the index for West Virginia ranged in the middle.  The state scored best on sales tax at 19 and worst on the unemployment tax at 29.

Outside of Pennsylvania (which scored a 19 overall), West Virginia was rated better than any other neighboring state.  Kentucky rated 24, Virginia 27, Ohio 39, and Maryland made the worst ten at 41.

With tax and fiscal policy rated in the middle of states, West Virginia's main concern remains the judicial system's unfriendliness toward free enterprise.  Those indexes usually rate West Virginia among the worst states for business.  Clearly, as the Mountain State continues to become more competitive in other areas, it must address judicial and regulatory woes.

State Tax Foundation Tax Climate Index Can Be Read Here