Sen. George B. Sinner, Published February 09 2013
Letter: Legislators aim to cut wrong taxThe only thing more certain in life than death and taxes is the enthusiasm to cut taxes. Today in Bismarck, the legislative enthusiasm to cut taxes is like a fever and, at the moment, many legislators are misdirecting their enthusiasm toward cutting two taxes that don’t need to be cut: corporate taxes and oil taxes.
Many legislators prefer to give
$25 million in tax relief to corporations, 82 percent of which goes to out-of-state companies. This enthusiasm completely ignores the reality that North Dakota already has one of the lowest corporate tax rates in the country. This push also disrespects the wishes of the voters who, back in 2008, rejected Measure 2, which would have lowered corporate tax rates by 15 percent. Seventy percent of the voters said “no” to these efforts then. Legislators would do well to listen to them now.
Efforts to cut our state’s oil extraction tax are even more misguided. It’s clear that our extraction tax rate is not inhibiting oil development in western North Dakota. That tax rate is the reason why our state enjoys a budget surplus. To borrow the old cliché: If it’s not broke, don’t fix it. But if we do cut the oil extraction tax, it could have long-term implications on our state’s finances when development does eventually slow down or level off. As this bandwagon starts to roll, legislators should remember that the oil is not going anywhere. And we should all remember the hard-fought battles throughout the 1970s to receive just compensation for our natural resources. We must tread carefully on any attempts to cut the amount our state is paid for what belongs to all of us.
Rather than focus on cutting corporate and oil taxes, legislators should focus instead on cutting taxes for those who we serve: our elderly, our working families and those on limited incomes.
I’m a banker and a businessman by profession. For the past 30 years, I have been well-served by a simple philosophy: “Respect the client.” I carried that philosophy with me as I campaigned for the North Dakota Senate this past fall. I tried to respect the voters in my district by providing them with a series of proposed policy solutions – not political slogans. One of the ideas I campaigned on was simple, straightforward tax relief, and I have proposed three bills to do just that.
The sales tax is the most regressive of all taxes. It disproportionately affects those who can least afford it. Legislators should make every effort to cut regressive forms of taxation, while preserving – within reason – progressive forms of taxation. Senate Bill 2277 will exempt all clothing from our state’s sales tax. Clothing, like food, is a basic necessity. This is why North Dakota does not tax food. We should not tax clothing either. Exempting clothing from sales taxes achieves two immediate objectives: It provides instant tax relief for all North Dakotans, and it levels the playing field for North Dakota clothing merchants competing with merchants in Montana and Minnesota. Previous efforts to exempt clothing have fallen short. But how can legislators today justify voting against this proposal while turning around and cutting corporate and oil taxes? In that vein, how could we also reject another sensible tax cut – cutting our state’s sales tax by one- half percent (Senate Bill 2358)?
We must also, for once and for all, simplify and lower property taxes. That’s why I’m proud to co-sponsor Senate Bill 2362. This proposal would cut property taxes on residential, agricultural and commercial property by 40 percent.
Cutting these regressive taxes is the ultimate respect we can show to our constituents. These proposals are balanced and sensible. We can afford to do it, and we should. Taken together, these three bills would dramatically lower our state’s tax burden, not just on those who need it the most but all taxpayers, in a fair and even manner. It benefits those who built our state, our elderly; those who are building our state, working families; and those struggling to get by, residents on fixed incomes. These are the people who elected us to represent them and their interests should always come first.
Sinner, D-Fargo, was elected to the North Dakota Senate in 2012 from District 46.