- - Tuesday, May 14, 2019


I’ve heard some of my colleagues in the North Dakota legislature say that an income tax isn’t that much. The 2.90 percent personal income tax and a 4.31 percent corporate income tax rate we have might not seem that high. But there are many states doing better than this and reaping the rewards that come with it.

It was President Calvin Coolidge who said that “collecting more taxes than is absolutely necessary is legalized robbery.” He was right. And these income taxes aren’t “absolutely necessary” for the North Dakota government. Not only that, they are also harmful to a growing economy.

The stats are clear. Compared to our neighbors in South Dakota — who don’t levy an income tax — we spend twice as much per capita. This means we don’t need high taxes to pay for all our spending. We just need to right the ship on spending as well. We should focus on that side of the ledger, instead of throwing more and more money from hardworking taxpayers at a problem and hoping a solution will just spontaneously arrive.

But there’s already a way to make North Dakota better — without any extra spending. Reduce both the income tax and government spending.

The seven states that don’t have an income tax — Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming — also have a 97 percent higher population growth than those that do.

We need a strong workforce in this state if we are going to compete and entice people to move and then stay here. We must give them a reason to live in North Dakota. In 2018, 17 states reduced their income taxes. While other states around the country are reducing taxes, so should we.

I don’t know of a better workforce incentive than reducing an individual’s income tax. It simply means people can keep more of the money they worked hard to earn. They can direct their earnings in the ways they want and not the ways that other people want.

In 2019, six more states decided to look at reducing their income tax. One of those states was North Dakota.

I introduced House Bill 1530 in the House Finance and Taxation Committee, of which I am its chairman. My bill approaches the desired outcome of reducing the income tax in a unique way. Since legacy fund earnings are currently deposited in a general fund and are not used that much, my bill takes 50 percent of these funds and offsets the income tax revenue that might be lost in the short term.

Even though we should work on our spending, my bill doesn’t punt a problem to the other side of the ledger. Instead, it will give us an appropriate amount of time to work on reducing our spending.

My bill moved on from committee. It was voted and passed in the House, but when it moved over to the Senate, it did not move on.

My colleagues in the upper house must not know a good idea when they see it. They must not want North Dakota to be a place both individuals and businesses want to place their roots. They must not care about the success of our state like I do.

I hope they reconsider, and I hope we get back on track to provide real solutions to the people of North Dakota.

• North Dakota Rep. Craig Headland is the chair of the Finance and Tax Committee in the North Dakota House of Representatives. He represents North Dakota’s 29th district and is a farmer.

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