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ANDY PETERSON: Tax rates give N.D. advantage over Minnesota

BISMARCK — Although the ink hasn’t even dried on the checks many businesses and individuals wrote to the IRS and the state government this year, the recent tax deadline provides a great opportunity to take a closer look at the state’s tax rates and their benefits.

Few can question the Greater North Dakota Chamber’s commitment to creating a strong statewide business climate. This includes ensuring state income taxes are as low as they can be without sacrificing the state’s ability to meet the needs of its citizens.

When businesses and individuals pay lower taxes, they are able to invest in new business activities or keep more of their paychecks to afford goods and services that enrich their lives. The state has made a commitment to lowering its taxes, and Gov. Jack Dalrymple and the Legislature deserve our appreciation for their success in doing this during the last several sessions.

Unfortunately, many politicians in high-tax states try to convince their residents that higher taxes lead to a better lifestyle. Consider the case of neighboring Minnesota.

While the state recently passed a few minor tax relief bills, Minnesota is known as a high-tax state. Supposedly, Minnesota’s high tax rates allow every resident to lead a better lifestyle.

North Dakota is known as a low-tax state, yet it leads the nation in economic growth with the fastest growing per capita income, the greatest trust in our K-12 education system and the second highest per capita income in the United States. A Gallup poll also recently identified North Dakota as the happiest state in the union.

North Dakota keeps less of its citizens’ money, but Minnesota often thinks of itself as the better place to live.

A family of four in Minnesota making $100,000 per year, itemization not considered, pays $4,409 in state taxes. If this family lived in North Dakota, they would only pay $941 in state taxes.

If the same family made $150,000 per year, they would pay $7,934 in Minnesota state taxes compared with $2,013 in North Dakota. At $200,000 per year, itemization not considered, the family would pay $11,578 in taxes in Minnesota or $3,154 in North Dakota.

And at $250,000 per year, itemization not considered, the family would pay $15,503 in Minnesota vs. $4,399 — more than two-thirds less — in North Dakota.

One can argue that quality of life is impacted by how much each state collects from each and every taxpayer. But it’s abundantly clear that when a resident saves or spends those dollars as he or she sees fit (instead of the state keeping those dollars), quality of life immediately improves.

Minnesota is a fine state with good citizens, and if they don’t mind paying significantly higher taxes, that is their business. What North Dakotans should be thankful for, and consider promoting, are the benefits of a better business climate and the continuation of lower taxes.

Peterson is president and CEO of the Greater North Dakota Chamber of Commerce.