The answer is nothing, or at least nothing that the Democrats’ “Build Back Better” bill is likely to fix.
That’s the thrust of this excellent column by Charles Lane. He finds, as Joe Manchin must have, that there’s not much in that legislation for the Mountaineer State — certainly not enough to overcome Manchin’s policy-based objections to BBB, especially its inflationary impact.
It’s quite clear what’s in BBB for New York, California and New Jersey. The most expensive item in the House-passed version is $275 billion worth of restored federal deductions for state and local taxes (SALT). This is valuable to high-tax blue states, especially their upper-middle-class suburban residents, which explains why representatives from those districts, per American politics 101, made it a dealbreaker in the House. . . .
The SALT break helps mainly well-off taxpayers for whom it is profitable to itemize deductions. West Virginia, as one of the poorest states, has the lowest share of itemizers of any state, 17.3 percent, according to the Tax Foundation. That finding is based on data from 2016 — before the 2017 tax bill raised the standard deduction, further reducing the number of itemizers.
There’s also something in BBB for Michigan:
[It provides] a tax break for purchases of electric cars, which substantially favors vehicles built by members of the United Auto Workers. This creates a de facto penalty for the Toyota plant in Buffalo, W.Va., which is nonunion.
The electric-car subsidy is part of BBB’s $550 billion in tax incentives and spending to promote alternative energy and otherwise fight climate change. . . .
[D]ecarbonization presents a disproportionate economic challenge for West Virginia. It’s one of six states (along with Texas, Oklahoma, North Dakota, Pennsylvania and Wyoming) that account for a combined 55 percent of the primary energy production in the United States. The vast majority of West Virginia’s share comes from coal and natural gas — industries that also fund the state’s government with tens of millions of dollars in taxes each year.
Lane acknowledges that coal employs only 11,000 West Virginians. But that’s three percent of all jobs in the state, and some of the best-paying ones still available. According to Lane, the average salary of these jobs is $55,630 per year in a state whose median household income is just under $47,000. Lane also points to the intangible worth of these jobs “such as local tradition and working-class pride.”
Natural gas is a growing business in West Virginia. Lane finds that BBB isn’t pro-gas, either: “It includes a stiff fee on methane emissions and $6 billion to convert gas appliances to electric alternatives.”
Passing Obamacare required Democrats to include the “Cornhusker Kickback” to obtain the vote of Ben Nelson, the Nebraska Democrat. Other goodies were included to secure support of various Senate Democrats.
Maybe if the Democrats go back to the drawing board on BBB they will come up with something special for West Virginia. But the Dems’ hatred of coal and love for green energy may stand in the way of serving up anything palatable to Sen. Manchin.
In the meantime, Lane’s withering assessment of this legislative session stands:
At times, Manchin’s motivations for resisting BBB have been portrayed as a “mystery.” The real mystery is why the White House and Senate Majority Leader Charles E. Schumer (D-N.Y.) bet their political future on getting Manchin to vote for a bill such as this one.
When Manchin, defending his position, says, “If I can’t go home and explain it to the people of West Virginia, I can’t vote for it,” he’s not lying. He’s practicing American politics 101. Who knows what the other Democrats are doing.