Low-Income Wyoming Residents Pay Higher Tax Rate Than The Wealthy
A new report shows Wyoming’s lowest-income residents pay a higher tax rate nearly three times higher than the state’s top earners. While the state doesn’t have an income tax, sales tax ends up being a bigger portion of the lower class’ expenses. The report comes from the progressive advocacy group Better Wyoming and the bipartisan Institute on Taxation and Economic Policy out of Washington D.C.
Nate Martin is the director of Better Wyoming. He said that not having an income tax only benefits the very wealthy.
“The effect is that the rich essentially get a free ride. And it’s not a secret that Wyoming is a ‘tax haven’ where the very wealthy come to shield their money from having to pay taxes,” said Martin.
Because low-income residents spend most or all of their income each month, most of that income is taxed in the form of sales tax. Sales tax ends up being a bigger portion of expenses in low-income households.
Martin said this makes it difficult for the state to diversify its economy. He said the lack of an income tax makes it difficult for the state to benefit from new industries and a larger population, but a larger Population would generate a stronger economy.
“You would have people who need public services, like schools and roads and law enforcement, but you don’t have any mechanism to generate revenue to pay for those things,” Martin said.
In a recent speech to the state Revenue Committee, Representative David Miller, a Republican, agreed that an income tax was needed if the state wants to diversify, but did not advocate for implementing an income tax. He said the state can generate enough revenue if it takes full advantage of mineral resources and continues taxing oil and gas companies.
Governor Matt Mead has also advocated for tax reform as part of the ENDOW initiative to diversify Wyoming’s economy. However, he has not specifically discussed implementing an income tax. The Joint Revenue Committee brought up a corporate income tax at its latest interim meeting.