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Why Not Use Surplus to Cut Food Tax? Because, Says GOP, Because…

Say, why don’t we take that $350-million surplus that Governor Noem has fabricated from our federal coronavirus relief dollars and do something good for South Dakotans, like exempting four-five years of sales tax on food?

Senator Troy Heinert (D-26/Mission) proposed Senate Bill 104 to roll back our sales tax on food by a percentage point a year, down to zero by July 1, 2025. We could easily cover the revenue shortfall from that family-friendly tax cut with those surplus dollars for the first four years, by which time the roaring economic recovery we’ll get from all those Fauci/Biden vaccines and four years of good government, not to mention the ongoing wind boom and a trend of in-migration that precedes our Governor’s coronavirus posing, should be providing ample revenues to replace the nickels we squeeze from each loaf of bread.

But no, no, no, says fairy God-princess and Revolutionary War reënactor Senator Jessica Castleberry (R-35/Rapid City), who voted with her Republican colleagues on Senate Taxation last week to once again kill this reasonable tax relief. This passionate conservative says we can’t run the risk of shrinking state government:

The main foible with this proposal to do away with our sales tax on groceries was the lack of any plan to replace the revenue that would be lost. Currently, that loss would be to the tune of around $70 million. South Dakota is only one of three states to tax our groceries at our full sales tax rate, however we are also one of nine states without a state income tax. Same arguments on both sides we’ve heard for years, duplicated complications, and at the end of the day, the same song and dance. This one is a good candidate for erroneous claims at election time that those on the the Senate Taxation Committee “raised” taxes for South Dakotans, because we didn’t approve a well-meaning, but ultimately defective approach to removing the sales tax on food.

As with proposals before, this one failed in the Senate Taxation Committee on February 3rd. We want to find ways to reduce taxes in South Dakota, but they must have practical implementation that won’t weaken our state funding in the long run [Sen. Jessica Castleberry, “Tax on Necessities? SD Sales Tax on Groceries and Other Considerations,” blog, 2021.02.05].

Hmm… Senator Castleberry says her party wants to reduce taxes, but offered a chance to do so, she says we can’t weaken state funding. She orates passionately about the danger of a strong state, but she declines to reduce taxes for fears of weakening the state.

What is your real position on taxes and state power, Senator Castleberry? Contrary to the fantasies stoked by our misappropriation of coronavirus relief dollars, we can’t expect the fiscal fairy to leave state revenues under the Governor’s pillow. Your formulation appears to forbid voting for any tax cut without voting for a concomitant tax increase. But Senator Heinert proposes to replace food tax dollar-for-dollar with a progressive income tax, you’ll start screaming party slogans at tax-and-spend Troy. So do you really support tax cuts and smaller government? Or are you just committed to locking South Dakota into status-quo taxation policy forever? Is there any logical, consistent path for translating the things you say on the campaign trail into actual policy reform?

Oh well: Senator Castleberry will continue to keep her state robust with spare change taken out of our pockets when we buy soup.

16 Comments

  1. jerry 2021-02-11

    No political favors in helping the poor, there simply is no contribution money in it.

  2. grudznick 2021-02-11

    Mr. H, are you suggesting publicly that the government has a $350,000,000 structural surplus that could go on indefinitely? That does not seem to be the case from the documents grudznick has analyzed, but I do not have your math skills so perhaps I am wrong. Could you do a blogging on how all the math works and put it in a sheet of those squares like the Googles have? Put it so we could all play with it and move numbers around. That would be really neato.

  3. Arlo Blundt 2021-02-11

    Well…the tax on food is the most regressive of all taxes and it is sacred to Republicans for that reason…”Everybody should pay taxes” they claim while exempting corporations (who aren’t people in the context of taxes, I guess). Fundamentally, the Republican Party believes the noble poor should be punished for their status….paying sales tax on food will instill discipline and self respect…or something…we can’t put a budget together without the sales tax on food….they claim..a tax on income is inhumane and socialistic..a tax on corporate profits will erode our values and destroy our business community…a tax on the poor is essential to preserve the values and charactor of our people…We’ve heard this nonsense for 60 years

  4. SD is 20 per cent nonwhite 2021-02-11

    A restaurant can legally charge, say 6 cents for a meal, and at 7.5% Republican Governors tax, the tax bill to the customer would be Zero.

    Now a restaurant wants to make a profit, right? So all beverages and t shirts, hats, photos, books and everything else the restaurant sells would be priced and taxed then at 6.5 or 7.5%

    Really, we need a modest income tax that Gov. Kneip tried to pass in 1975. I think a top rate of 3 to 5% for those who earn 100,000 or more. 20,000 and under, zero income tax. Also, a 1% and 2% tier for incomes from 20 001 to 99,999.

    Wouldn’t you love eating out, paying 6 cents for a meal, drinking water, and paying zero tax? Of course, tips received by wait staff would be taxable income.

    It can be done!

  5. SD is 20 per cent nonwhite 2021-02-11

    We lose only 70 million dollars by removing tax on food?

    The 3 or 4 % top income tax would bring in more!

    If you can sharpen a pencil and write in a notebook, you’re smart enough to be a leader!

  6. grudznick 2021-02-11

    grudznick would love paying 6 cents for a meal. But I fear the eateries I favor could not produce a meal for me at the profit margins 6 cents would allow.

    grudznick gladly pays whatever a good meal costs, plus the profit an establishment needs. All the profit a fellow needs, for if he is too greedy or has poor waitresses, grudznick will take his business elsewhere.

    They call that capitalism and the free market. It works.

  7. Mike Livingston 2021-02-11

    jinkies cruds sounds like you bought a bag of sour grapes.

  8. leslie 2021-02-11

    Arlo, you are right to harp on the conservatism brand cemented into the republican party leading up to 1964.***

    In one of nine states w/ no income tax law:

    “…all those Fauci/Biden vaccines and four years of good government” could do us some good. But not unless:

    “Could vote guilty: McConnell, Shelby, Burr, Inhofe, Capito, Grassley, Portman, Cornyn, Tillis, Sullivan, Barasso, Hoeven
    68-32.” Bill Kristol tweet

    If Mcconnell does, Thune would. C

    But Grassley hid a tablet in his desk and barely lifted his head. ***

    Oh and there’s this too:

    @ChrisMurphyCT 1/2 hr
    “I remember the moment I saw Trump’s tweet attacking Pence. We were in the chamber as aides were scrambling to bar the doors. Some were sobbing in fear. The mob was outside. Someone yelled out shots had been fired.

    I turned to Tim Kaine and said, ‘Oh my god, he’s egging them on.’”

  9. Jenny 2021-02-12

    Just buy your.groceries in MN if you live next door. You can save a lot of money with no food tax here. No clothing tax either.

  10. Cathy B 2021-02-12

    Jenny, Now that you mention it, MN’ans pay no tax on their utility bills either. Nor on the labor on their car repairs.

  11. Buckobear 2021-02-12

    Our taxes here in North Mississippistan are low, but we don’t get much for them.

  12. Caleb 2021-02-12

    Can’t committees propose and implement amendments? If Castleberry’s main gripe was a lack of replacement funding, why didn’t she encourage anyone to suggest alternative funding sources, let alone propose any herself? If that happened, I rescind my question.

  13. mike from iowa 2021-02-12

    Our taxes here in North Mississippistan are low, but we don’t get much for them.

    That is the point, Buckobear. Low tax. Low service, including snow removal and road plowing. iowans got an extra dime per gallon gas tax and the state finally finished widening out HiWay 20 from east to west. Thge last time I was on 20, there were no bathrooms alongside from south of Storm Lake all the way to Dike, about 20 miles west of Waterloo, and that bathroom was at a public lake/park.

  14. SD is 20 per cent nonwhite 2021-02-13

    There’s a link on The Daily Beast that works now.

    Title is “Gov. Kristi Noem sneers at a handout except for the family ranch”

    Article shows that Noem and family got $4 288 571 in USDA farm support programs between 1995 to 2020. And she quotes an economist, saying There’s no free lunch.

    That’s a lot of money for one family.

    Let’s create an answer, a solution from this.

    Let’s roundup the numbers first. $4 300 000. Per adult person in South Dakota. 650, 000 times $4.3 million dollars.

    Imagine it’s 2072 and the Democratic Party and the Green Party have been running the State for 50 years.
    They have developed an idea.

    4.3 million dollars per adult. Not in cash (the casinos would love that) but in monthly income, every month.

    So one adult in South Dakota and the State invests (in trust) the 4.3 million times 4% in a blue chip dividend paying stock. 4% x 4.3 million is $172 000 a year or $14 333 every month!

    A very good Universal Basic Income, for all adults!

    Quite a vision!

    The sum of money is about 2.795 trillion dollars, all in fund, the interest on this sum goes to all adult residents!

    (You may say, why should Noem get all that money? Let’s not be jealous, let’s build something greater than the USDA rich farmers program)

    This requires 3 things:

    1. Think differently, think bold!
    2. Democrats will rule from 2022 to 2072, and all Republicans and Blue Dog Democrats who vote republican can all belly up to the bars and drown their sorrows.
    3. This will prove these 3 things can absolutely work-South Dakota believes in supporting “the general welfare”, universal basic income for all is great and it works, and the Luke 6:38 idea- Give and it shall be given unto you is the great idea behind all human love and economic progress.

    This will be fun. Build it!

  15. Porter MoonBase Lansing 2021-02-14

    grudznik … Are you still stealing meals from the buffet lines? And not tipping? Hmmmmm? Why else would you be bragging yourself up for eating expensive food?

  16. SD is 20 per cent nonwhite 2021-02-15

    “Everything is for us and nothing is opposed to our heart’s desires. The abundant life
    promised of old is as near as your positive thinking.”

    Raymond Charles Barker, Create The Life You Want.

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