Banking On Tourists
Even should that occur, we're continuing to rely on broad economic and market forces beyond our control to determine our state's fiscal destiny. Twice now in the past 3 years, forecasters have gotten it wrong and there's no reason to expect their crystal balls to get any more prescient. Meantime, our sales tax revenues fluctuate with the whims of the commodity markets, which seems amazingly inefficient, considering that taxation based on personal income would probably be a much more stable alternative. The ag sector in South Dakota now has 76% less money to spend than it did in 2011, to the tune of around $3 billion. That debacle, as noted by our elected officials, is probably the most responsible for our sales tax woes. Meantime, I was startled to discover in a report from
We're too self-fixated on our status as a state with no income taxes, as I often hear, but I think some comprehensive tax reform that reduces sales taxes, puts a freeze on property taxes with strict limitations on annual increases, and initiates a progressive tax on income, both personal and corporate, merits consideration. Ideally it would result in a tax shift, not a tax increase. Using U.S. Census Bureau data, the financial information website 24/7 Wall Street reports that income growth in South Dakota households from 2011-2015 ranged from 5% in the middle levels to nearly 10% in the upper. The story lists us as one of the 9 states in the country where the middle class is being left behind, income growth disparity (definitely a subject worth pursuing in another post) being a good reason why. Given the trend, a graduated income tax seems like a reasonable way to expect people making good money here to bear their share of the burden, which they now escape given our regressive and bumpy sales tax-dependent system. The dots between tax fairness and smoother government revenue streams look connectable to me.