West Virginia has the Third Highest State and Local Tax Burden in the Nation for FY 2016
Apr 12, 2018
In Fiscal Year (FY) 2016, West Virginia collected $7.2 billion in state and local taxes—or $3,926 for every man, woman, and child. While this is an impressive sum of money, it tells us little about whether or not the average West Virginia taxpayer can afford this level of taxation?
To better answer this question, this analysis will calculate West Virginia’s tax burden relative to the private sector. Ultimately, it is the private sector that creates new wealth and income. A high tax burden means a state is hobbling its private sector relative to other states and reducing their long-run economic growth potential.
Click here to view tax burden data by state, type of tax, and for years 1950 to 2016
Unfortunately for taxpayers, as shown in Chart 1, West Virginia’s state and local tax burden (tax collections divided by private sector personal income) was the third highest in the nation for FY 2016 at 18.5 percent—or 30 percent above the national average of 14.3 percent.
#WestVirginia state and local #taxburden in FY 2016 was the 3rd highest in the nation at 18.5%— 30% above US average of 14.3% http://bit.ly/2FX9C8F @keypolicydata #WVpol #WVleg #WVsen #WVgov #PolicyData (click to tweet)
As shown in Chart 2, West Virginia’s tax burden has increased over time by 142 percent to 18.5 percent in FY 2016 from 7.7 percent in FY 1950.
#WestVirginia state and local #taxburden has increased 142% between FY 1950 (7.7%) to 2016 (18.5%) http://bit.ly/2FX9C8F @keypolicydata #WVpol #WVleg #WVsen #WVgov #PolicyData (click to tweet)
Click here to view tax burden data by state, type of tax, and for years 1950 to 2016
To put West Virginia’s tax burden into perspective, let’s compare it to size of major industries in the state (as a percent of private sector income). As shown in Chart 3, West Virginia’s 19.1 percent tax burden is greater than these combined industries: manufacturing (8.8 percent), construction (7.1 percent), and utilities (1.6 percent)
West Virginia’s high tax burden is driven by a high individual income tax burden (4.8 percent, 8th highest) and high all other tax burdens (5.3 percent, 3rd highest)—all other taxes being primarily severance taxes on natural resources, especially coal.
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Florida—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself (see Chart 4).
The 20 West Virginia counties with the highest local government tax burden include:
- McDowell County, WV (15.0 percent)
- Boone County, WV (12.3 percent)
- Mingo County, WV (8.9 percent)
- Gilmer County, WV (8.9 percent)
- Pleasants County, WV (8.9 percent)
- Doddridge County, WV (8.4 percent)
- Pocahontas County, WV (8.0 percent)
- Wyoming County, WV (8.0 percent)
- Logan County, WV (8.0 percent)
- Marshall County, WV (7.1 percent)
- Wetzel County, WV (6.9 percent)
- Tucker County, WV (6.7 percent)
- Fayette County, WV (6.5 percent)
- Harrison County, WV (6.5 percent)
- Kanawha County, WV (6.4 percent)
- Mason County, WV (6.3 percent)
- Raleigh County, WV (6.2 percent)
- Ohio County, WV (6.1 percent)
- Cabell County, WV (6.0 percent)
- Grant County, WV (5.7 percent)
The 20 West Virginia counties with the lowest local government tax burden include:
- Brooke County, WV (4.2 percent)
- Monongalia County, WV (4.2 percent)
- Berkeley County, WV (4.1 percent)
- Lincoln County, WV (4.0 percent)
- Calhoun County, WV (4.0 percent)
- Jefferson County, WV (4.0 percent)
- Randolph County, WV (3.9 percent)
- Braxton County, WV (3.9 percent)
- Upshur County, WV (3.9 percent)
- Putnam County, WV (3.8 percent)
- Hampshire County, WV (3.6 percent)
- Mineral County, WV (3.6 percent)
- Clay County, WV (3.5 percent)
- Taylor County, WV (3.4 percent)
- Preston County, WV (3.3 percent)
- Monroe County, WV (3.3 percent)
- Pendleton County, WV (3.2 percent)
- Roane County, WV (3.1 percent)
- Wirt County, WV (2.9 percent)
- Barbour County, WV (2.6 percent)
Click here to view tax burden data by state, type of tax, and for years 1950 to 2016
Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 66 years! See if your state has been above or below the national average?
Category: Tax Burdens
J. Scott Moody
Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.
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