AARP of North Dakota has come out against the initiated being sponsored by Americans for Prosperity to cut North Dakota income taxes by 15%. Here’s their press release entitled “Think Twice Before Signing Petitions:”
AARP North Dakota is urging voters to think twice before signing petitions that would put two measures on the ballot. One of the measures would cut corporate and individual income tax rates, while the other would restrict government spending increases. Those objectives may sound appealing, but AARP opposes both measures because they would hamper state and local governments’ and school boards’ ability to respond to emergencies or shifting priorities.
“The rule of thumb is if something sounds too good to be true, it probably is,” says Linda Wurtz, AARP associate state director for advocacy. “We encourage members to look beyond the one-line selling points for these petitions to the long-term impact they would have on North Dakota.”
Income taxes are typically the most progressive of state taxes, that is, they are based on one’s ability to pay. Sales and excise taxes, however, are usually regressive, taking a higher proportion of income from low-income people than from high-income people. Property taxes are the most burdensome for retirees because they continue to increase over time.
State fiscal experts advocate a balance among these “big three” revenue sources as a way of avoiding the severe revenue fluctuations of business cycles and limiting competition between neighboring states with different tax rates.
If income taxes are reduced, the burden for running the state will be shifted to the other two primary revenue sources.
Essentially, what AARP is saying is that if we cut income taxes other types of taxes will have to be raised in order to make up the lost revenue. Now that might make sense if North Dakota’s budget were running pretty close to even, but given that the state ran a budget surplus in the hundreds of millions last session and is projected to possibly run a surplus that may be over $1 billion this upcoming biennium, does this argument even make sense? Of course not.
The simple truth is that the North Dakota state government has more many than it needs, so rather than let the legislators and Governor spend that money we need to make them give some of it back.
Which is why AARP is against the whole thing. See, groups like AARP exist for one purpose: To pry as many tax dollars at of the government as possible in the form of entitlements and other things in order to serve their dues-paying constituency. They’re a lobbyist group interested in expanding the size and scope of government, so of course cutting taxes comes as an anathema to them. They don’t want you to have more of your money so that you can spend it on what you want. They want the legislators they lobby to have that money so that it can be spent on the things they want.
To say that the tax cuts that would take placed should this initiated pass would create hardships for the state government requires us to believe two things: 1) That the hundreds of millions of dollars of budget surplus the state is enjoying isn’t enough money and 2) There is absolutely no wasteful spending that could be cut to make ends meet.
I think you’d have to be pretty naive to think either of those things are true.