MINOT, N.D. — In Bismarck, our lawmakers are debating two competing tax proposals.
One would reduce North Dakota's personal income tax brackets to two, with only the top bracket paying any tax at all. It would free roughly 60% of wage-earning North Dakotans from paying the income tax.
The other is a continuation of the property tax buy-down schemes, which lawmakers have spent billions on over the last decade while doing little to ease taxpayer angst over property taxes.
"Right now, North Dakota is providing, every biennium, $1.6 billion to the political subdivisions to help hold down taxes," Senate Majority Leader David Hogue, a Republican, said at a legislative forum in Minot over the weekend . And what are we getting for all that spending? “The taxes are going up, but they’re going up at a much lower rate, and that is because of the money that we’re putting out to the political subdivisions.”
In summary: Property tax buy-downs are spending, not tax relief. Because despite the billions spent on lowering property taxes, they haven't gone down. They're just going up more slowly than they would have.
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Allegedly.
But the enemies of income tax cuts, who are backing more "property tax relief" in the form of more spending, don't want you focused on that. They'd rather you be angry that income tax cuts would also apply to rich people.
Rich people who live in places like (clutch your pearls) Minnesota.
"A leading plan to cut taxes in North Dakota would be a boon for out-of-state earners," reads a recent headline over an article that, for the most part, doesn't mention the fact that rich people who live out of state pay property taxes too.
How much would those out-of-state taxpayers benefit from the property tax plan before the Legislature? We don't know. That's not reported. Probably not much, given the aforementioned history of "property tax relief" passed by the Legislature not lowering property taxes in any meaningful way.
Which is a hell of an argument for the property tax plan's supporters, isn't it? There plan wouldn't be of much benefit to rich out-of-staters, if only because it wouldn't be much benefit to anyone else either.
I'm honestly not sure why we're concerned about this "rich out-of-staters" stuff.
Whatever tax you want to talk about — property taxes, income taxes, sales taxes — are paid by rich people too. Disproportionately. What does being rich mean if not having more income, more property, and more significant shopping bills all of which produce more extensive tax obligations than those of us with more modest means?
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I'm not arguing against rich people paying more in taxes. As a general rule, though, if we accept the "rich people will benefit" argument against tax relief, what across-the-board tax reduction, such as the income tax reform before the legislature now, would ever be possible?
As for the out-of-state thing, who cares? People who pay taxes in North Dakota, and live elsewhere, are a boon. They produce revenue while using far fewer state resources our taxes support. They don't have kids in our schools, etc., etc. Again, any tax you want to talk about cutting — property taxes, sales taxes, income taxes — is also paid by people who live elsewhere.
Arguing against a tax reduction because rich people and out-of-staters and rich out-of-staters would enjoy some relief, too, is an invitation for us to cut off our noses to spite our faces.
I'll admit that in this debate, I have a significant bias for income tax reductions. I am not at all convinced that the legislature can deliver meaningful property tax relief, and as evidence, I would point to the last decade of the legislature spending billions on property tax relief and accomplishing almost nothing.
But, at the very least, if you're going to oppose income tax cuts, please do so for reasons that are more intellectually rigorous than this "rich out-of-staters" hoo-ha.
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