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ND needs to make good choices about taxes

Let’s face it, taxes are not popular.

North Dakota’s Gov. Doug Burgum said in his State of the State address on Tuesday that he eventually wants to work toward eliminating the state income tax.

Release the balloons; let’s schedule the parade; it is time for some hoopla.

Are you excited yet?

Well, let’s hit the brakes on the excitement and look at some numbers.

According to the 2021-2023 budget highlights on the Office of Management of Budget for the state, 18.3% of North Dakota’s general fund revenue is from income tax, or almost $800 million. Sales, use, motor and vehicle taxes make up 46.6% of the budget, or more than $2 billion.

If you look at the appropriations from the same budget highlights, nearly 78% of the entire state budget goes to health and human services, education and transportation. Good places for it to go, right back to the people. Nobody likes to pay taxes, but sometimes it is an easier pill to swallow if the money is going back into the neighborhoods we live in and the roads we drive on.

Please don’t think that we are against the elimination of the state income tax. What we do not want to see is an increase in sales tax or other regressive tax forms to generate the lost tax revenue. We do not want to see a progressive tax be eliminated and replaced by a regressive tax.

A progressive tax is a tax that takes a larger percentage of income from high-income groups than from low-income groups. A regressive tax is a tax that takes a larger percentage of income from low-income groups than from high-income groups.

Instead of spending time arguing the differences in the types of taxes and what works best, we want to put forth a question: what would happen if suddenly the corporate income tax, which generates about 4.8%, is increased to make up the tax revenue shortfall by eliminating personal income tax? The corporations in North Dakota would be up in arms.

Property tax is considered a progressive tax. How would the landowners in Ward County react to a tax shift? There was a little bit of grumbling when the new property tax bills were mailed with the new school taxes included.

Trying to increase the sales tax to replace income tax will disproportionally affect those who have less income but still need to buy products that have sales tax.

What we’re here ultimately to do is say this: Moving the tax revenue from a progressive to a regressive tax is like wearing your left shoe on your right foot. It doesn’t make sense.

But finding other progressive ways to replace any needed revenue lost by eliminating the income tax, we are 100% behind. It just can’t fall to those it will hurt the most.

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