—What’s the difference between Cory Heidelberger and Al Novstrup?
—They both may raise your taxes, but Cory at least will be honest about it.
Dana Ferguson said in August that the Republicans didn’t have to worry about District 3. The South Dakota Republican Party apparently disagrees. They’re so worried that seven-term incumbent Al Novstrup can’t hold onto his son’s Senate seat that for the second week in a row, the SDGOP has spent good money filling District 3 mailboxes with a negative attack on Al’s challenger, little old Democratic me.
The SDGOP continues to do me the favor of running a fifteen-year-old picture that shows me with a much healthier hairline than I have now. They also flatter me by assiduously reading my blog. They do break out a lot of exclamation points and the Crayon Font of Doom, but hey, this time, they’re attacking on policy. Yum yum! Let’s take a look.
First, before we get into particulars, let me be clear: Yes, on occasions when folks have said, “Holy cow! We don’t have enough money to pay for schools and roads and other public needs!” I’ve responded by suggesting that we may need to raise taxes. I did it last year when I supported the move to increase taxes to pay for road repairs. So did 99% of participants in the 2015 Chamber of Commerce Business Caucus. So did Al Novstrup, who voted for 2015 Senate Bill 1 to raise road taxes by $85 million.
I supported new taxes (along with tax reform) again this year when Governor Daugaard asked us to raise teacher pay by raising sales tax. So did Al Novstrup, who voted for 2016 House Bill 1182 to raise sales tax by $107 million.
Al Novstrup votes for two huge, historic tax increases in a row, yet his party sends out a postcard telling voters that I’m the one coming for their wallets? Puh-lease!
The SDGOP imputes to me four proposed tax increases: a state income tax, a corporate income tax, an additional penny sales tax, and repeal of sales tax exemptions (which the Republicans don’t call new taxes when they repeal exemptions, but hey, off we go!). For evidence, they cite (lazily, without titles for easier searching) three blog posts and one campaign website post in which I shared my responses to the NFIB candidate survey. Interestingly, all three of the blog posts were actually bill proposals based on reader suggestions last winter. So to call those proposals the “Heidelberger Tax Plan” discredits the public input that generated those ideas.
But let’s look at each proposal, with links to the original articles:
- State personal income tax: Throughout my blogging career, I have consistently argued that taxing income more fairly and effectively raises revenue than taxing property or sales. It works at the federal level; it works in 43 other states; it could work in South Dakota. And as I have said multiple times, including in the comment section under the article cited, I would support implementing progressive income taxes in a revenue-neutral fashion, with new income tax revenue replacing regressive sales tax and property tax revenue.
- State corporate income tax: South Dakota already taxes banks and financial corporations. Why discriminate against those corporations? Why not tax all corporations in a similar fashion on the wealth they create rather than on their property? The corporate income tax proposal the postcard cites also offered fairness to small community banks by lowering the current bank franchise tax rate on their first $400 million in net income and imposing progressive rates on higher income.
- Cutting sales tax exemptions: Instead of picking favorites, why not apply sales tax more uniformly? And if we are going to keep any breaks in the sales tax code, why not give the first, biggest break to South Dakotans buying food and clothing? The Republicans fail to note that the exemption repeal they cite also called for setting the tax rate on food and clothing to zero, thus reducing your taxes at Hy-Vee and Penney’s by $170 million.
- “Adding a new penny of sales tax“: Here the Republicans get truly deceptive. NFIB asked candidates if the favor or oppose “Authorizing counties to levy up to a 1% sales and use tax on top of all the sales taxes currently authorized by the state and the city.” I said favor, because, like Al Novstrup, I believe in local control, but unlike Al Novstrup and his party, I don’t believe in treating counties like black sheep and denying them the same taxing authority we grant to cities. Allowing counties to tax sales would let them derive revenue from the alcohol sales that cause a big portion of county expenses.
These tax policies are all negotiable. They are all part of a larger concern I have that taxes in our state be fair.
And unlike Al, who hid his intention to raise sales tax this year until the moment he voted and now wants voters to forget his record of raising taxes, I’ll be straight with you and invite an honest conversation about state tax policy.
The taxman cometh? Ha! He’s already here. I’m just offering to replace him with an honest, fairer taxman.