Can North Dakota afford to eliminate corporate income taxes?
Can North Dakota afford to eliminate corporate income taxes? The state is projected to generate $253 million via corporate income taxes over the 2007-2009 biennium. Total revenue generated by the corporate income tax has steadily grown over the past several biennia and is expected to account for approximately 9% of the total general fund revenue. Figure 1 charts the growth in revenue. Figure 1 According to reports, North Dakota is expected to have a budget surplus upwards of $1.3 billion for the 2007-2009 biennium which creates a great opportunity for the state to cut taxes. If nothing changed (including the state collecting the same amount of corporate income tax over the next biennium), HB1255’s $90.8 million fiscal impact on state revenue would still provide the state with approximately $162 million in corporate income tax revenue. Bartsch, however, has noted that the idea that nothing else will change is “nonsense.” Reducing the corporate income tax gives additional incentives for
