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Inequitable tax best forgotten

Mar. 13, 2013 @ 12:00 AM

By repealing an ordinance that called for an occupation tax, the Huntington City Council this week said good riddance to a plan that was fraught with problems from the start.

The repeal reverses action taken by the council in June 2011 to impose a 1 percent tax on wages and salaries earned on jobs within Huntington. The tax was part of a city tax reform plan initiated under a pilot home rule program intended to give some designated cities more freedom from state laws. As approved, it would have replaced the city's $3-a-week user fee paid by people who had jobs in the city.

One result of the tax was that many people would see their payments go up substantially for the privilege of working in the city. Beyond that, though, were other drawbacks. The tax would result in inequities among people who would be required to pay it and those who wouldn't. It was also likely to drive some businesses out of Huntington and would reduce the take-home pay of many workers at a time when the economy sorely needed their buying power to improve.

As it turned out, the tax was never enacted because several entities and individuals filed a lawsuit to block it as well as to question the constitutionality of the entire home-rule program, which otherwise yielded many positive results. The tax was put on hold, and the case still lingers in court. The repeal presumably will lead to dismissal of the lawsuits and bring an end to the entire episode.

One potential positive outcome from the proposal is that state lawmakers may outlaw such occupation taxes in the future. A pending bill in this year's legislative session would extend the state's home rule program for five more years and allow more cities to participate. However, the legislation expressly forbids any West Virginia city from enacting an occupation tax in the future.

As the experience in Huntington shows, that's a smart move.



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