Dear Senator:
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, I write to express our strong support for House Bill 1530. In recent years, lawmakers have been very friendly to taxpayers across the state. North Dakota has a strong taxpayer bill of rights, a pro-business tax and regulatory environment, and has slashed income taxes on numerous occasions since 2009. Enacting HB 1530 would build on these significant events by using earnings from the Legacy Fund to replace personal and corporate income taxes. We strongly believe enacting this legislation would be an impressive accomplishment for the state of North Dakota and its taxpayers and urge Senators to follow the lead of the House and swifty pass HB 1530.
The state individual income tax currently tops out at 2.9 percent, a relatively low tax rate that brings in about $800 million over the biennium budget. By gradually repealing the state income tax, North Dakota will be in a better position to compete with states that do not collect income taxes, like neighboring South Dakota. Repealing income taxes will allow every North Dakotan to keep more of what they earn and put their money to better use than any state bureaucrat can. Data from the state tax commissioner indicate taxpayers have an average income tax liability of $900. For hardworking North Dakotan families, $900 will be a significant tax cut and help them meet their monthly bills or save for new purchases.
If signed into law, North Dakota would become the eighth U.S. state with no state income tax, joining South Dakota, Wyoming, Nevada, Alaska, Texas, Washington, and Florida. Over last decade, states that choose to not tax income have experienced economic growth rates far exceeding states that do levy a tax on income. North Dakota would undoubtedly share in this success.
HB 1530 would also use earnings from the Legacy Fund to reduce corporate income taxes for job creators across the state. This business tax, with a top marginal rate of 4.31 percent, only generates $100 million in tax revenue, a relatively small amount in a multi-billion dollar budget. Reducing this rate would also make North Dakota a more attractive place to expand or start a business.
Lawmakers wisely established the Legacy Fund in 2010, which now holds over $5 billion in rainy day resources. The best way North Dakota can spend this money is by giving it back to taxpayers in the form of tax relief instead of using it for new government programs.
HB 1530 is a strong step forward, and its passage would be a major victory for taxpayers and businesses of all sizes. NTU proudly endorses this significant legislation and urges all lawmakers to support it.
Sincerely,
Thomas Aiello
Policy and Government Affairs Associate