Saturday, December 2, 2017

Proposals Forwarded to Enable West Virginia Business Tax Reform

An academic leader in West Virginia for many years, Robin Capehart previously served as the president of West Liberty University, where he oversaw increased enrollment and an expanded scope of program offerings. Robin Capehart has been extensively involved in legislative issues and, as the former chair of the Governor's Commission on Fair Taxation, he advocated for ending taxes assessed on business capital investments in machinery, inventory, and equipment. 

With such taxes seen as penalizing businesses that want to improve their infrastructure, the West Virginia state Senate is centered on enacting meaningful reform that has been recommended for two decades. One area of discussion among lawmakers is compensating for potential tax revenue loss through a lengthy tax phase-out process and replacing personal property taxes with real property taxes. As described by Senate President Mitch Carmichael, the latter strategy would generate a relatively small impact, as a large part of that tax is “exported” to out-of-state property owners. Another proposal in play for enacting reform while preserving state coffers involves broadening the tax base by eliminating a number of sales tax exemptions.

Thursday, November 16, 2017

A Brief History of Tax Reform in American Government

As president of West Liberty University in Wheeling, West Virginia, from 2007 until 2015, Robin Capehart presided over one of the oldest and most prestigious schools in the region. Today, he serves as a senior fellow with the Public Policy Foundation of West Virginia. In this position, Robin Capehart also uses his extensive experience as a government advisor on tax reform to conduct research and author papers on issues of importance to the economic and social well-being of the state and the nation.

Tax reform in the United States has a lengthy and complex history. For almost a century after its founding, the country funded its operations largely through tariffs, only establishing a limited income tax during the Lincoln administration. Just seven years after the Civil War concluded, Congress rescinded that tax.

Thinking on the issue changed in 1913, when legislation permitted the imposition of a new federal income tax. Tax rates burgeoned during World War I, with the very top rate hovering in the 90 percent range until John F. Kennedy pushed through a significant tax cut. Since then, presidents have initiated major tax cuts about once in a generation.

Major successes in tax reform include a report by William Simon, treasury secretary under President Gerald Ford. The Department of the Treasury’s 1977 Blueprints for Basic Tax Reform had long-lasting policy effects.

The Reagan administration achieved a high point in tax reform in the 1980s, when it not only slashed taxes, but also anchored reform in a thoroughgoing simplification and consolidation of the tax code.

Friday, November 3, 2017

School Choice Champions See Opportunities in West Virginia

As the president of West Liberty University in West Virginia for close to a decade, Robin Capehart directed the administration of one of the state’s oldest institutions of higher education. Today, he serves as a senior resident scholar at the Public Policy Foundation of West Virginia. An accomplished scholar and attorney in the field of taxation and tax reform, Robin Capehart has also served as a consultant to state government on that subject.

In addition to his work as the head of West Liberty University, Mr. Capehart maintains a strong interest in education policy in general. He has authored several papers on that topic, published in recent years in Public Policy Quarterly. In particular, he favors broadening of school choice, which was among the pioneering standards put forth by President George H. W. Bush’s administration at the 1989 Education Summit.

Proponents of school choice emphasize the importance of respecting the rights of individual families to determine the best type of school for their own children. Charter schools, magnet schools, voucher funding, and homeschooling are among the possible means of increasing school choice available to communities.

Charter schools are not currently approved in West Virginia, yet proponents believe that their cause is gaining ground. Two members of the statewide school board recently resigned, offering the governor the opportunity to reorganize educational infrastructure. In addition, elected officials and the public alike have expressed a lack of confidence in current educational bureaucracy.

Saturday, October 28, 2017

West Virginia Tax Reform - Excess Acreage Tax

The past president of West Liberty University, Robin Capehart served as chairman of the West Virginia Governor’s Commission on Fair Taxation from 1997 to 2000. As the commission’s chairman, Robin Capehart coauthored a 1999 study of West Virginia’s tax structure. The nearly 1,000-page report determined that the state’s tax system was burdened by an overly complicated and regressive structure that was still geared to an early-20th-century economy.

The Excess Acreage Tax is one of many specific examples outlined in the report of outdated tax measures that do not fit the economy and society of West Virginia today. Established in 1905, the Excess Acreage Tax imposes a one-time tax of $0.05 per acre on any corporation purchasing 10,000 acres or more of property in West Virginia. However, this does little to address the state’s historic economic problem of high rates of absentee land and mineral ownership. In 2012, West Virginia’s top 25 landowners owned about 18 percent of private land in the state, but none of the 10 largest owners had their headquarters in West Virginia.

The commission’s report recommended several changes to modernize the Excess Acreage Tax to reflect today's economic and fiscal situation . These recommendations included increasing the tax from $0.05 per acre to $0.50 per acre, lowering the property size threshold to 1,000 acres, making the tax annual rather than a one-time measure, and allowing taxed corporations to claim a credit against West Virginia’s severance tax. Based on data from the West Virginia Property Tax Department, adopting these changes could generate an estimated $1.7 million in annual tax revenue.