- Associated Press - Tuesday, January 20, 2015

BISMARCK, N.D. (AP) - Those who earn the lowest wages in North Dakota should be at the head of the line for income tax relief, a Minot lawmaker says.

Republican Sen. David Hogue told Senate Finance and Taxation Committee on Tuesday that lowering the income tax rate to 0 percent for people with low incomes “is the right thing to do.” The proposed legislation, which would cost the state an estimated $151 million annually in lost revenues, also would force lawmakers to keep closer tabs on spending.

“Legislative bodies are not inclined to say ‘no,’” Hogue said. “We all have special interest groups wanting us to spend money.”

North Dakota’s income tax has five brackets, with a top assessment of 3.22 percent.

Single people earning less than $36,250 would pay no state income tax under Hogue’s proposal. For a married couple filing jointly, the first $62,600 would be exempt from state income tax, the measure says. It also would exempt the first $48,600 for a resident filing as head of household.

The proposal would expire in two years and could be revisited by the Legislature after that, Hogue said.

North Dakota income tax collections have more than doubled since 2004, from $214 million to about $500 million at present, state Tax Department records show.

State tax commissioner Ryan Rauschenberger has said the Legislature has cut income tax rates a combined 38 percent since 2009.

“I think we can afford to cut more and the first place to start is the lower income bracket,” Hogue said.

North Dakota’s financial reserves are pegged at about $2 billion and lawmakers are pushing a flurry of bills this session aimed at cutting income taxes, including one that would set the state income tax rate at 0 percent for all taxpayers. GOP Gov. Jack Dalrymple also has proposed cutting all tax rates by 10 percent.

Hogue’s income tax bill was the first to get a hearing. The full Senate will consider the bill later.

The state Tax Department estimates about 465,000 North Dakota residents filed state income taxes last year. Hogue’s proposed legislation would affect about 170,000 taxpayers, the agency said.

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