The voters of North Dakota are considering the abolition of the property tax. If it does this, it will be the first state to do it. Supporters of the proposal gathered 28,000 signatures.
Local government officials are upset. They see their #1 revenue source disappearing. North Dakota counties get 60% of their revenue from property taxes.
The schools would feel the pinch first.
Some critics say that all of the local governments would go bankrupt. This would place cities and states on state aid.
Supporters say these criticisms are scare tactics.
Oil money is flowing. Supporters ask: Why tax property? The state can impose a sales tax.
Problem: sales taxes are regressive, meaning that everyone pays the same percentage. Liberals have taxes where everyone pays the same percentage.
Eliminating property taxes would put more than $800 million back in the pockets of property owners, stimulate the economy and create thousands of jobs, Tuttle said, referencing this study from a Massachusetts free-market think tank.
“The pitch is very simple. It’s do we want to grow the economy of North Dakota because we can,” Tuttle said. “We’re having the discussion because we have oil money. But the oil money is not what’s going to pay for this. It pays for itself.”
State officials say the sales tax would have to be doubled. Or maybe the income tax would be tripled.
What is clear is that the elimination of property taxes would create enormous confusion at the state level. No one knows how it will sort out politically.
The voters will have a chance to decide. This will let politicians see whether there is a mass movement of upset citizens who want tax relief.