Tax cuts and a single flat rate are on the table in North Dakota under a plan spearheaded by Governor Doug Burgum, House Tax Committee Chair Craig Headland, and State Tax Commissioner Brian Kroshus.
The proposal would flatten and reduce the state’s progressive income tax that tops out at a rate of 2.9% down to a single 1.5% rate. It would remove tax obligations for individuals with an adjusted gross income under $54,725, and couples earning under $95,600.
“This tax relief plan would make North Dakota a top 10 low-tax state, and move much closer to the ultimate goal of income tax elimination,” said Americans for Tax Reform President Grover Norquist. “Governor Burgum, Representative Headland and the many others working hard to cut taxes for North Dakota families and businesses deserve credit, and the proposal deserves support from legislators.”
The proposal would be a huge step forward for North Dakota, providing needed tax relief for families and small businesses struggling with high inflation driven by Washington’s reckless spending spree. It also simplifies the tax system by removing brackets and making it very clear what taxpayers and small businesses who file as individuals should owe.
Nearly 20 states have cut income taxes in the past two years. There are now nine no income tax states, including neighboring South Dakota. Significant tax reform in North Dakota is needed to stay ahead in the competition to attract jobs and businesses.
The newly-announced plan would set North Dakota’s flat tax lower than second-lowest Arizona (2.5%) and third-lowest Indiana (2.9%), making it the lowest flat tax state in the nation. It also puts the state even closer to income tax elimination.