Getting politicians—even politicians of the same party—to agree on anything can be a herculean task. Too often, ulterior political motives or clashing personalities get in the way of real reform.

This was what the Cardinal Institute for West Virginia Policy faced when they were fighting for comprehensive tax reform in the Mountain State.

However, because of Cardinal’s tireless efforts and creative strategies, West Virginians won long-overdue tax relief.

Cardinal Institute’s Campaign Leads to West Virginia’s Largest Tax Cut in 37 Years

Before this year, West Virginia lawmakers hadn’t passed any significant income tax reforms since the 1980s. This tax attrition eventually led to West Virginia having some of the highest tax rates in the Mid-Atlantic. As Garrett Ballengee, Cardinal’s Executive Director describes it, “Yes, West Virginia has the highest marginal income tax rate of any of our neighboring states. Shocking? Probably. Dumb? Certainly.”

To put pressure on West Virginia’s leaders to finally enact tax reform, Cardinal launched a multi-faceted public education campaign. The goals of their campaign were to educate West Virginians on the facts of the state’s tax system and advocate for sound tax reform. So, during the 2023 legislative session, Cardinal launched targeted social media campaigns to reach taxpayers (and voters) online. Cardinal’s team also wrote numerous blog posts and op-eds for local and national news outlets (including National Review) discussing West Virginia’s tax system and the reforms needed.

Following Cardinal’s campaign, Gov. Jim Justice announced substantial tax reform in his State of the State Address.

But nothing involving politics is ever easy.

Despite the West Virginia House of Delegates backing the governor’s proposal, the Senate signaled that they thought it was too ambitious and stunted its progress.

When negotiations between the legislative chambers seemed to stall, Cardinal jumped into action again and announced an online “Tax Reform Week.” Cardinal hosted events with Economist Dr. Art Laffer, Grover Norquist of Americans for Tax Reform, Stephen Moore of the Heritage Foundation, and Jonathan Williams of the American Legislative Exchange Council.

Two days after Cardinal announced their Tax Reform Week, the Senate released their own tax reduction plan. Two days after that, Gov. Justice announced that he was hosting a tax reform roundtable event of his own with Grover Norquist, business leaders, policy and trade association leaders, leaders in the state government, and Cardinal’s Garrett Ballengee.

Thanks—at least partially—to the pressure Cardinal put on state leaders to finally enact meaningful reform, the governor and legislative leaders began making progress in their negotiations. Cardinal’s team focused their messaging on three key areas:

1. The state was collecting record surpluses.
2. Lawmakers had successfully undertaken other transformational policy reforms over the last decade.
3. West Virginia could rely on the experiences of other states to craft the soundest tax reform policies possible.

Finally, after months of negotiations, West Virginia’s leaders passed HB 2526 on March 7, 2023.

HB 2526 is West Virginia’s largest tax cut in 37 years. According to Metro News, HB 2526 enacts “A 21.25 percent reduction in personal income tax rates, a full rebate on the car tax, a 50 percent rebate for small businesses on their machinery and inventory tax, and a tax credit for disabled veterans on their personal income taxes on a homestead. The compromise also included a mechanism to reduce income tax rates further if future revenue collections reach certain benchmarks. […] The tax cut is retroactive to January 1st. It will save taxpayers about $700 million the first full year. According to the Tax Foundation, West Virginia becomes the 22nd state since 2021 to cut income taxes.”

Victory for Hardworking West Virginia Families

While a monumental tax victory like this requires many different people and parties working together, it’s safe to say that without Cardinal’s tireless work, this reform would not have happened.

For Cardinal, this win has led to the formation of a Tax and Fiscal Center which will be the mainstay of their policy operations. For the state, this initial reform lays the groundwork for other tax and fiscal policy solutions that prioritize citizens and taxpayers.

West Virginians finally have long-overdue tax relief. And thanks to the Cardinal Institute, that tax relief and reforms like it will continue.

For their success in bringing tax relief to millions of West Virginians, Cardinal won State Policy Network’s Bob Williams Award for Outstanding Policy Achievement—in the “Biggest Home State Win” category.

Related Reading:

West Virginia Poised to Join Ranks of States Cutting Income Taxes
Cardinal Institute in National Review

Cardinal Institute Celebrates Historic Tax Reform in West Virginia