There could soon be a tenth state with no income tax.
The North Dakota Senate has the opportunity to pass a bill this session that would eliminate the income tax. The legislation, HB 1530, which sailed through the House, is sponsored by Rep. Craig Headland, finance committee chair and Taxpayer Protection Pledge signer.
North Dakota’s “Legacy Fund” consists of oil tax revenue that has been saved over time, and now amounts to north of $6 billion. Headland’s bill would use this fund to cover the estimated $900 million in income tax the state takes in during a two-year cycle, and end the state income tax.
The state is also seeing revenues come in higher than expected, so dropping the income tax is more than affordable: “A revised revenue forecast released today by the North Dakota Office of Management and Budget (OMB) estimates general fund revenues of $4.3 billion for the 2019-2021 biennium, an increase of $51 million from the November forecast.”
Ending the income tax would be a great move for North Dakota taxpayers and the economy. Recent tax cuts in North Carolina have led to the state outpacing the region in GDP and population growth. No income tax Florida saw record job creation from late 2017 to late 2018, and Texas led the nation in the rate of GDP growth in 2018.
This move is also necessary, as the Legacy Fund is a ripe target for special interests, and politicians looking to spend on various projects. If the fund is not used to eliminate the income tax, it will end up being used for something that either does less for taxpayers, or is downright wasteful.
North Dakotans should be able to keep their hard-earned money. The Senate and Governor Burgum should seize this opportunity to deliver what would be an earth-shaking win for voters, taxpayers, and the state – building on the great success they have already had.