The U.S. Bishops' 1985 document Economic Justice for All suggests that any evaluation of the tax system should be guided by three principles:
- Taxes should raise adequate revenue to meet the needs of society, especially those of the poor and vulnerable.
- The system should be progressive, requiring those with relatively greater financial resources to pay higher rates of taxation.
- Taxes such as a "flat" tax, food taxes, sales taxes, and payroll taxes are basically regressive, and should be minimized or eliminated.
"Families with incomes below the poverty line should not be required to pay income taxes. They are, by definition, without sufficient resources to purchase the basic necessities of life. They should not have the additional burden of paying taxes." (Economic Justice for All, #202 http://www.osjspm.org/cst/eja.htm )
In Economic Justice for All, our nation's Bishops state that the tax system should constantly be evaluated in terms of its effect on the poor and otherwise vulnerable. West Virginia ranks consistently in the top ten states on the level of its taxation of the incomes of persons living below poverty level. Although the poverty level for a family of three is consider to be $17,028, West Virginia begins taxing income at $10,000. Our state taxes a family of three with minimum wage earnings ($10,712) at the fourth highest rate in the country: $143. The state's six percent food tax exacts a much larger percentage of a poor family's income than of a wealthy family's. Meanwhile, severance and resource taxes are proportionately low, and their collection only minimally enforced. In the interest of justice, tax policy should be aimed at meeting the needs of the poor, and requiring those who profit from our state's natural resources to pay a fair share.
Suggested Policy Directions
We support policies that would:
- Would raise the no-tax floor in West Virginia to at least the national poverty level
- Explore the possibility of an Earned Income Credit for very low income families
- Gradually eliminate the food tax, or provide vouchers to low income families
- Provide for consistent enforcement of payment of severance taxes on coal, natural gas, oil, and timber
- Evaluate tax incentives for businesses on the basis of their effectiveness in increasing economic well-being for the people of West Virginia