South Dakota State Capitol front with clouds by Samir Luther is licensed under CC BY-SA 2.0

South Dakotans have the opportunity to protect their hard-earned money from out-of-state special interest groups. On June 7th, they will have the chance to support a measure that would make it harder to raise taxes. If approved, this measure would be a huge win for all residents of the Mount Rushmore State.

Constitutional Amendment C would raise the vote threshold for any ballot measure that creates or raises taxes, increases or imposes fees, or spends more than $10 million in the first five years from a simple majority (50%) to a super majority (60%). This taxpayer safeguard would bring tax increases on the ballot more in line with tax increases introduced in the legislature, which require 2/3 support (67%) for approval.

“It should be difficult to raise taxes. Taxes last forever, a simple majority is not good enough,” said Grover Norquist, president of Americans for Tax Reform. “Billionaires from other states could fund an effort to raise taxes and with 51% could saddle all of South Dakota with a tax increase for decades in the future. We’re protected from the legislature doing it with a simple majority, we need to be protected from an initiative campaign that can win with 51% of the vote.”

Right now, South Dakota has a glowing reputation as a taxpayer friendly state. It is one of nine states that do not impose taxes on wage income and one of only two states that do not impose a corporate income tax nor a gross receipts tax. 

Amendment C would help South Dakota remain this way by making it much harder for out-of-state liberal billionaires and special interest groups to impose economically harmful policies. Arizona provides a recent example of this concern and shows why Amendment C is so important.

In 2020, Arizona voters narrowly approved a measure that, had it not been struck down by the courts, would have imposed permanent $1 billion income tax hike. This measure, Proposition 208, would have created a new 3.5 “surcharge” on certain income taxpayers, resulting in Arizona having a top income tax rate of 8%. Arizona would have had the unwelcome distinction of being home to the 10th highest income tax rate in the country and the second highest income tax rate in the region.

Adding insult to injury, the backers of Prop. 208, which were primarily out-of-state, misled the public on the true impact of this “surcharge.” They continued to claim that it would only affect high earning individuals when in fact roughly 50% of those who would have been forced to pay the tax were small businesses.

Amendment C, by requiring a 60% to raise taxes, would protect South Dakota taxpayers from harmful measures such as Prop. 208. This would keep out-of-state special interests and billionaires from harming individual taxpayers, families, and small businesses across South Dakota.