Taxing the Rich, Teton Style

By on June 13, 2018

As state revenue streams dry up, why are Wyoming’s richest residents absolved from paying their share?

JACKSON HOLE, WY – David Miller has an apocalyptic vision for Wyoming—one that would shackle the state even more tightly to mineral industries while threatening public lands and excusing rich people from paying taxes.

Wyoming can thwart Miller’s plan. But it needs Jackson’s help.

Here’s the deal: Miller is a geologist who works for mining companies. He’s also a powerful member of the Wyoming State Legislature. In fact, barring some benevolent turn of fate, this Riverton state representative will likely become our next Speaker of the House.

Miller outlined his vision for Wyoming at a recent meeting of the Legislature’s Joint Revenue Committee. The committee was discussing how to confront the state’s massive budget shortfall, which is the result of downturns in Wyoming’s mining industries.

Wyoming relies on mineral taxes to pay for roughly 70 percent of its public services and infrastructure—schools, roads, hospitals, etc. When minerals like oil, gas, and coal go into slumps, as they currently have, Wyoming has a hard time paying for itself.

The solution, Miller told the committee, is “clear as a bell: If you want to diversify the tax base, we need a state income tax,” he said.

But, he continued: “I, for one, do not advocate a state income tax. I enjoy the mineral industry paying all the [state’s] bills.”

Instead of tax reform, Miller suggested that Wyoming should depend even more on mining. There are many types of minerals in the state we aren’t digging up and taxing, he said, but we should be. What about lithium? What about rare earth? We should also build nuclear power plants and tax their output. And increase wind tax.

“And, frankly, there are many, many other minerals that aren’t being produced out there,” he said.

Miller and other mining-obsessed lawmakers are like mineral anvils around Wyoming’s neck.

No matter what Wyoming mines, the prices of commodities like coal and natural gas—or lithium and rare earth—fluctuate in ways we cannot control. Mining dependence dooms Wyoming to boom-and-bust cycles, and busts result in budget crises like the one we currently face.

Miller’s idea that more mining will make Wyoming prosper also flies in the face of an increasingly clear fact: economics in the west are changing. Historically, Western public lands have been valued for their extractable resources, like minerals and timber. But people have begun to recognize that protecting the land has monetary value, too.

Across the United States, outdoor recreation is emerging as an economic powerhouse. Although it already generates billions in consumer spending in Wyoming each year and employs 50,000 people, the state’s outdoor industry remains underdeveloped.

But growing Wyoming’s outdoor industry will be difficult if our public lands become even more patchworked by oilfields, wind farms, pit mines and pipelines.

Folks in Jackson know better than anywhere else in the state the value of protecting public lands—your economy depends on it. If Wyoming is going to reject Miller’s reckless vision and choose another path, Jackson’s role as a leader in the state’s outdoor industry will be important.

But not as important as Jackson’s role in paying a statewide income tax.

“Again, the solution is a state income tax,” Miller said. “But that’s something I’m not advocating.”

In these concluding remarks, Miller spelled out the commonsense alternative to his awful vision. For 20 years now, economists have recommended Wyoming adopt a state income tax. Doing so would provide stable funding for public services and infrastructure, end the boom-bust cycle, and encourage economic diversification.

But if Wyoming gets an income tax, Teton County will pay a big chunk of it.

No, no—not you, fair reader. I’m talking about the billionaires!

Let me explain.

Income taxes tend to be progressive, which in economic terms means that the greater your income, the higher rate you pay. This protects working people from excessive taxation and ensures the most fortunate among us cough up their fair share.

Thanks to an obscure provision in Wyoming’s state constitution, however, a Wyoming income tax wouldn’t just be progressive— it would be ultra progressive, essentially sparing working- and middle-class people from any tax increase whatsoever, while mostly targeting the very rich.

This constitutional provision says that, if Wyoming gets an income tax, residents will automatically receive a credit against the income tax for the sales and property taxes they already pay. The Legislature could easily include a credit for renters, as well, essentially zeroing out income tax bills for anyone without a tremendous income.

As you’ve likely noticed, there are some tremendous incomes in Teton County. Their recipients would pay the lion’s share of a Wyoming income tax.

In order to thwart Miller’s vision of mining-madness, we need to repeat his own words: “the solution is a state income tax.”

It’s important for Teton County to embrace this message, since its residents would be most affected.

If your billionaire neighbors are out of town, feel free to promote it on their behalf.

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