West Virginia received some good news in the 2014 State Business Tax Climate Index compiled by the conservative Tax Foundation. The foundation ranked West Virginia No. 23 — which was ahead of each of its neighbors, including No. 41, Maryland.
Given West Virginia's image problems, terrain, isolation, judiciary and some historically confrontational union issues, the state needs every break it can get — and in this case — make.
Under former Gov. Joe Manchin, the state privatized workers' comp and began a glacially slow decline in its business taxes. Gov. Earl Ray Tomblin also deserves credit as state Senate president for his role in bringing fiscal sanity to the state.
The corporate net income tax will drop to 6.5 percent on Jan. 1. Please notice how much quicker politicians are to raise taxes than they are to lower them.
West Virginia is one of a few states that tax business inventories and impose a business franchise tax.
Instead of taxing "the privilege of doing business in West Virginia," state officials need to do everything they can to encourage good corporations to do business here, by removing unnecessary taxes such as these.
The state does offer a host of tax credits to specific industries and companies, but why should the state get to play favorites.
"Policymakers create these deals under the banner of job creation and economic development, but the truth is that if a state needs to offer such packages, it is most likely covering for a bad business tax climate," the Tax Foundation noted in its report.
For example, North Carolina gave Dell $240 million in state and local tax credits, but Dell's factory lasted only four years. The state would have been far better off spreading that tax relief among all its businesses.
West Virginia needs to learn from that and structure its taxes in a manner that encourages businesses and treats everyone fairly. A long-term plan that helps everyone will help the economy far more than a temporary break to a lone company.
But ranking 23 means West Virginia is ahead of 27 other states. Now to surpass the remaining 22 states.