South Dakota maintains position as lowest taxed in nation
South Dakota has once again taxed its residents less than those in every other state in the nation.
A new release by the U.S. Census Bureau confirms the stateâs reputation as a low-tax haven, ranking it 50th in the nation with $1.3 billion in state tax collections in 2010. It also marks the first time collections have fallen year over year since 2001 in South Dakota. The state collected $1.33 billion in 2009.
âI donât think itâs a surprise,â said Tony Venhuizen, a spokesman for Gov. Dennis Daugaard. âOur voters have had the philosophy we want to keep our taxes low and efficient; the ranking clearly shows weâre doing that.â
South Dakota does not collect personal income and corporate income tax. As a result, each state resident paid on average $1,602.21 in taxes in 2010. A majority of that, $1.07 billion, comes in the form of sales taxes. Per capita, North Dakota pays some of the highest taxes at $3,933 each but that figure is skewed by taxes collected on oil and other natural resources.
However, nationwide per capita calculations can be deceiving, according to Scott Hodge, president of the Tax Foundation, a non-partisan tax research organization in Washington D.C.
âThe census looks at tax collection and thatâs not necessarily a tax burden, because there is tax shifting. So South Dakota taxpayers may actually have a slightly different burden than the government collects,â Hodge said. âFor instance, North Dakota has all that mineral wealth, they can shift a lot of those tax collections and mineral extraction to taxpayers in other states as those goods are exported.â
While South Dakotans do not have to pay an income tax, they do pay their fair share of taxes for certain products. For example, the stateâs 24-cent gas tax ranks 26th in the nation. The highest in the nation is California at 47 cents. Wyoming ranks 49th with 14 cents and Montanaâs 28 cents is 19th. Every pack of cigarettes sold in South Dakota also produces $1.53 for the state, ranking it 22nd in the nation. New York is the highest at $4.35 a pack.
Venhuizen said despite those taxes, the lack of a state income tax more than makes up for the difference.
âWe shouldnât spend more than we take in,â Venhuizen said. âGov. Daugaard doesnât believe in raising taxes so that means we have to operate the right size state government to where itâs in-line with tax revenue.â
Daugaard and the Legislature cut $127 million from the stateâs $4 billion budget this year.
Rep. Bernie Hunhoff, D-Yankton, said the state needs to find a balance between frugality and investments, adding that legislators from both parties within the state are starting to ask: âhave we been too cheap for our own good?â
âFrom a public policy standpoint, we have decided to take a low-tax, low-frills approach to government,â Hunhoff said. âWeâre going to continue to be conservative and practical, but other states are making some really smart investments in education and infrastructure that seem to be paying off for them.â
Hunhoff said the state needs to consider it no longer competes against just North Dakota or Wyoming but is now part of a global economy.
âWe have this 1950s mentality, chasing smokestacks and having the lowest-paid workforce and lowest taxes with no industry,â Hunhoff said. âItâs not a model for success in 2011, thatâll certainly be a model for failure in 2020.â
http://www.rapidcityjournal.com/news/article_77a3ed28-5f1f-11e0-8834-001cc4c03286.html
South Dakota has once again taxed its residents less than those in every other state in the nation.
A new release by the U.S. Census Bureau confirms the stateâs reputation as a low-tax haven, ranking it 50th in the nation with $1.3 billion in state tax collections in 2010. It also marks the first time collections have fallen year over year since 2001 in South Dakota. The state collected $1.33 billion in 2009.
âI donât think itâs a surprise,â said Tony Venhuizen, a spokesman for Gov. Dennis Daugaard. âOur voters have had the philosophy we want to keep our taxes low and efficient; the ranking clearly shows weâre doing that.â
South Dakota does not collect personal income and corporate income tax. As a result, each state resident paid on average $1,602.21 in taxes in 2010. A majority of that, $1.07 billion, comes in the form of sales taxes. Per capita, North Dakota pays some of the highest taxes at $3,933 each but that figure is skewed by taxes collected on oil and other natural resources.
However, nationwide per capita calculations can be deceiving, according to Scott Hodge, president of the Tax Foundation, a non-partisan tax research organization in Washington D.C.
âThe census looks at tax collection and thatâs not necessarily a tax burden, because there is tax shifting. So South Dakota taxpayers may actually have a slightly different burden than the government collects,â Hodge said. âFor instance, North Dakota has all that mineral wealth, they can shift a lot of those tax collections and mineral extraction to taxpayers in other states as those goods are exported.â
While South Dakotans do not have to pay an income tax, they do pay their fair share of taxes for certain products. For example, the stateâs 24-cent gas tax ranks 26th in the nation. The highest in the nation is California at 47 cents. Wyoming ranks 49th with 14 cents and Montanaâs 28 cents is 19th. Every pack of cigarettes sold in South Dakota also produces $1.53 for the state, ranking it 22nd in the nation. New York is the highest at $4.35 a pack.
Venhuizen said despite those taxes, the lack of a state income tax more than makes up for the difference.
âWe shouldnât spend more than we take in,â Venhuizen said. âGov. Daugaard doesnât believe in raising taxes so that means we have to operate the right size state government to where itâs in-line with tax revenue.â
Daugaard and the Legislature cut $127 million from the stateâs $4 billion budget this year.
Rep. Bernie Hunhoff, D-Yankton, said the state needs to find a balance between frugality and investments, adding that legislators from both parties within the state are starting to ask: âhave we been too cheap for our own good?â
âFrom a public policy standpoint, we have decided to take a low-tax, low-frills approach to government,â Hunhoff said. âWeâre going to continue to be conservative and practical, but other states are making some really smart investments in education and infrastructure that seem to be paying off for them.â
Hunhoff said the state needs to consider it no longer competes against just North Dakota or Wyoming but is now part of a global economy.
âWe have this 1950s mentality, chasing smokestacks and having the lowest-paid workforce and lowest taxes with no industry,â Hunhoff said. âItâs not a model for success in 2011, thatâll certainly be a model for failure in 2020.â
http://www.rapidcityjournal.com/news/article_77a3ed28-5f1f-11e0-8834-001cc4c03286.html
