August 24th, 2022

This afternoon, Governor Burgum along with Republican legislative leadership, held a press conference to announce their intent to pass a Flat Income Tax reform package during the 2023 legislative session.

Under the proposed plan, all North Dakotans making under $54,725 (single) and $95,600 (married) would pay zero income tax, and all income over those figures would pay 1.5% flat income tax rate based on federal taxable income.
(Not sure if they meant to put a marriage penalty in those figures but the bill has yet to be drafted.)

This is not the first time a flat tax plan has been proposed, but it is the first time a governor and majority party leadership has gotten out ahead of such a plan this early before a legislative session.

Back in 2012, I commissioned the Tax Foundation based in Washington D.C. to come up with a list of recommendations for improving North Dakota's income tax climate.

In the 2013 legislative session, State Senator Joe Miller introduced several bills based on this research. One of those bills was Senate Bill 2237 which was an outright 1.5% flat tax on all incomes. While that bill did not go far, it did help move the discussion in the right direction.

In 2014, Democratic-NPL candidate for Tax Commissioner Jason Astrup proposed a flat tax plan (which I developed for him).

The plan even got public support from then-minority leader Kenton Onstad:
"The proposed income tax relief Astrup announced simplifies the current rates into just one bracket and creates an exemption for all filers, allowing the gross incomes of single filers to go untaxed at $50,000 and at $100,000 for married filers. Not only does this benefit all taxpayers in the state, but tens of thousands of small businesses across the state who pay tax at the individual level. These proposals have bipartisan appeal and show that Astrup knows how government needs to work across party lines to respect the taxpayers’ money."

In 2015,House Bill 1296 sponsored by State Representative Kim Koppelman sought to bring a flat tax to North Dakota at a 2% rate above $18,000/$36,000 income levels. Again, the North Dakota Watchdog Network promoted this bill strongly during the session.

In 2019, two flat tax bills were introduced. House Bill 1535, again by State Representative Kim Koppelman; and House Bill 1222 introduced by State Representative Jeff Hoverson at a 1%.

As you can see, there is a long record of these bills being introduced.

The difference between then and now is that in the past, the establishment of the Republican Party has opposed such ideas. Now, it is a different story.

If the political winds don't change, and there can be a bi-partisan open-mindedness to the issue as there was less than a decade ago - North Dakotans might see real, actual tax reform in 2023.

Please consider donating to the North Dakota Watchdog Network to make sure we can be there to help push this plan - as we have been in the past.

-Dustin Gawrylow, Managing Director

North Dakota Watchdog Network