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Argus Agrees with DFP: Smith Out to Expand Tax Base, Not Raise Taxes

The Sioux Falls Argus Leader gets around to fact-checking Kristi Noem’s campaign squawking about Democratic candidate for governor Jamie Smith’s proposal to tax marijuana to make up for the revenue we’d lose repealing the food tax (which is a step further in developing a comprehensive policy to make repeal of South Dakota’s unusual and regressive food tax real than Noem has taken since her campaign-trail conversion to this good Democratic policy). Reporter Annie Todd tentatively comes to the same conclusion that I forthrightly stated on Tuesday: Noem is misrepresenting Smith’s practical fiscal proposal:

Now a new Noem ad has hit the airwaves. “What did he just say” takes snippets of Smith’s comments from the meeting this week and alleges if Smith is elected as governor, South Dakota families and their pocketbooks will hurt more from his tax plan.

But for those who attended the Rotary meeting, they might think there’s a bit of disconnect with the ad and ask whether Smith’s comments are being taken out of context [Annie Todd, “Fact Check: Did South Dakota Governor Candidate Jamie Smith Actually Say He Wanted to Raise Taxes?Sioux Falls Argus Leader, 2022.10.21].

Todd also adds this comment from Smith’s Monday appearance at the Rotary forum that Noem skipped:

I also need to rely heavily on people like Linda Duba and our appropriations committee to make sure we’re prioritizing those funds to go to the right spots. And I trust that they can do that with the revenues that we have currently in our state. I’m not advocating for new taxes. I’m advocating for taxes on new things as we have those opportunities like marijuana and more things to tax. I’m also advocating that we use that money in the order that I believe is most important [Smith, in Todd, 2022.10.21].

Smith meant exactly what he said, what all the Rotarians who were there heard him say, and not what Noem who was not there says he said. Smith enunciated the same sensible low-tax fiscal approach that governors before him, including Noem herself, have espoused: promote economic development, expand the goods and services produced in South Dakota, and thereby expand the tax base so we can tax more things and keep our overall tax rates low.


  1. M 2022-10-22 08:52

    Only in this state could sales be overlooked. Thanks for bringing this up. Current dealers have job security although cops will now go after the suppliers instead of the users.

  2. Donald Pay 2022-10-22 10:01

    Well, the concept of finding more things to tax is a great Republican ploy to get you from dealing with tax fairness. I’m sure that’s why Smith might just pull this off. Take a Republican talking point or smoke a little weed, it doesn’t matter which, and you don’t have to deal with reality. It’s Republican nirvana.

    Marijuana sales will not be large enough to cover the sales tax on food. Everyone needs food. After they’ve bought food, a few folks might pick up a small amount of weed. You would have to burn a lot of weed at 5% to cover the food tax loss. So, I expect you could tax it like booze, but I don’t think that would cover it. If you tax it enough to cover the cost of ending the sales tax on food, you put it out of reach of your average stoner. They would probably just go to the local dealer, rather than the mall, to get their untaxed smoke . Besides, if it’s medical, it shouldn’t be taxed at all.

    I’m all for taking the sales tax off food, and a few other things, like diapers, toilet paper, feminine hygiene items, etc., but don’t fall for the Republican BS that expanding the items on the Republican tax system will restore sanity to South Dakota finances. It just won’t. The only thing you can do is to tax income or wealth. Then you can stop taxing necessities, lower property taxes and create tax fairness.

  3. P. Aitch 2022-10-22 15:08

    Mr. Smith. Here are some ideas for new taxes for your innovation skill starved state. Head taxes (tax on the number of employees a company has), parcel taxes (a parcel tax is a flat tax on every landowner. It is sometimes linked to the property’s size or its improvements.), sugar taxes (those syrupy drinks that cost us all money in higher medical costs), developer taxes (once SD becomes a Democrat state the growth will be unstoppable), expand to full year tourist taxes, and internet sports betting taxes.

  4. Observer 2022-10-22 20:27

    Now you know why Kristi didn’t show up for the debate – she would have heard what Jamie Smith actually said.

  5. grudznick 2022-10-22 21:01

    You might re-write that Blogline as “Argus and DFP agree. Smith is out.”

    Be more accurate.

  6. Frank J Kloucek 2022-10-22 21:20

    Kcinzndurg Grudznick Sorry Once again you keep getting things back words oops backwards, Smith will achieve with common sense, integrity and a willingness to sincerely work with South Dakotans for South Dakotans!

  7. grudznick 2022-10-22 22:22

    Rotary is a cult. Mr. Smith and Mr. Kloucek support exclusive cults. You just can’t win with cults.

  8. Cory Allen Heidelberger Post author | 2022-10-23 09:03

    Donald makes a good point that a marijuana tax likely would not come close to fully replacing revenue from food tax.

    The LRC just released its fiscal note on Rick Weiland’s proposed food tax repeal. LRC estimates food tax generates $119.1 million a year. In Fiscal Year 2022, tobacco tax generated $49.4 million. Alcohol taxes (wholesale and retail) appear to have generated only $12.1 million.

    Would marijuana purchases exceed tobacco purchases?

    But I don’t want the replacement issue to overshadow the moral case for repealing the food tax. Most other states manage to get by without taxing the basic stuff of life; South Dakota has a moral obligation to do the same. If we can’t fund our basic government functions without taxing baby food and peanut butter sandwiches, then we’re a sorry excuse for a state government. We should not fund government with immoral taxes.

  9. 96Tears 2022-10-23 10:44

    Not knowing the difference between raising taxes and expanding the tax base should be disqualifying for anyone running for Governor. That makes Noem either a half-wit or a bald-faced liar after wasting one term in the Governor’s office.

    At age 50, she’s also wasted four years in the SD House and another eight years in the US House, and still doesn’t know the difference between raising taxes and expanding a state’s tax base. She can only be a half-witted, bald-faced liar.

    Well, at least she can ride a horse.

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