Incentivizing Capital Improvements through West Virginia Tax Reforms

Public Policy Foundation of West Virginia
Image: ppfwv.org

As the president of West Liberty University from 2007 to 2015, Robin Capehart oversaw sustained administrative development and growth initiatives. Increasing West Liberty University enrollment, he also enlarged the degree and certificate programs in ways that attracted returning adult students. With a background as an attorney, Robin Capehart has also been at the forefront of tax reform efforts as West Virginia’s Secretary of Tax and Revenue.

In a 2015 interview, Mr. Capehart gave an example of the need for business tax reform that lessened the burden for capital expenditures on companies. A business that held a $120,000 piece of machinery for seven years would hypothetically get the value down to $30,000.

However, purchasing a new piece of equipment at the same price would raise taxes paid to those due on equipment valued at $120,000. With the taxed value of the equipment declining only gradually, this provides a distinct disincentive to modernize. The key, then, is to get the business tax system beyond one devised in the 1930s and reflect transitions that have taken the economy from one based primarily on agriculture and natural resources to one centered on manufacturing and services.