Legislature 2008: Taxes

The business franchise tax has been roundly denounced as a jobs killer, a costly hurdle to improving West Virginia's business climate. The tax represents a fraction of net equity, which includes stock value and retained earnings.

Lawmakers are moving to eliminate the tax, though they differ on the pacing as The Register-Herald of Beckley reports. But some experts are questioning the degree to which either approach would boost the state's economy.

"There's scant evidence that eliminating the tax on capital formation would have much impact at all," reports Tim Huber, business writer for The Associated Press. "Economists and even the state Chamber of Commerce say businesses give more weight to other factors when they're considering expansion."

Huber also includes last week's Senate debate on a failed bid to trigger an immediate repeal with the pending bill.

"Until we get down to zero, it's not going to make us competitive with neighboring states,'' Sen. John Yoder, R-Jefferson, was quoted as saying. "If we do it immediately, the economy will then start to grow. ... If we just do it gradually, it's never going to make any difference until the very end.''