James Kerian: North Dakota Has An Opportunity For Real Tax Relief


House Majority Leader Al Carlson, R-Fargo, announced last week that he is introducing a bill to phase out North Dakota’s income tax.  Carlson floated this proposal in an interview nearly two and a half years ago and Representative Scott Louser, R-Minot, announced here on SAB that he would introduce legislation with the same purpose.  Support for the elimination of the state’s income tax has been building for some time.

The majority leader’s announcement, however, should significantly invigorate this movement.  It is rare for someone so close to the top of the state leadership to be pushing for such a significant reduction in the power of the state government over each individual.  Conservatives should not let this opportunity go to waste.

The recent buydowns of property taxes have served only as a transfer of spending from the state government to local governments.  Little, if any, of the buydown has turned into tax relief for North Dakota families and in many areas local spending has increased so quickly that property taxes are still going up.

Since the sales tax has a similar intermingling of state and local government there is every reason to expect that a reduction in the state sales tax would have the same outcome.  Local governments would be free to discover “needed” expenditures, to increase their local sales tax to match any decrease in the state sales tax and to simply absorb the revenue into their own budget just as they have done with the property tax buy downs.

However, because there are no county or municipal income taxes in North Dakota the elimination of the income tax would actually keep money in the hands of North Dakota citizens and their families and out of government budgets.  This would be real tax relief for all North Dakotans.

As expected Democrats and liberal Republicans are insisting that we can’t afford this tax relief, that no one really cares about the income tax and that property tax should receive all the political attention.  They know that two years ago a large number of conservatives worked very hard to eliminate the property tax and that many of them feel betrayed by a lot of the Republican legislators (even the more conservative ones) who either ignored or publicly opposed Measure 2.

The left’s best hope to derail real tax relief here in North Dakota is to triangulate.  If they can use the resentment and distrust among conservatives over the Measure 2 campaign to keep us from uniting behind the elimination of the income tax then they can continue to shift money from one government coffer to another without ever allowing a real reduction in North Dakotan’s tax burden.  If they can’t then North Dakotans will have real tax relief.  The choice is going to be up to us conservatives.