Wyoming Liberty Group
Brand New Custom Dynamic Economic Model of Wyoming
Economy Demonstrates Real-Life Impact of Proposed Changes to Sales Tax
February 9, 2017 Cheyenne, WY - On Thursday, Wyoming Liberty Group released its timely reports on Wyoming's fiscal and economic problems as demonstrated by a sophisticated new dynamic model of Wyoming's economy.
These comprehensive economic studies were conducted in partnership with the Economic Research Center (ERC) at The Buckeye Institute in Columbus, Ohio. Economists at the ERC analyzed both the challenges and several potential policy solutions for Wyoming's state budget woes. With its unique custom economic models that employ top-of-the-line dynamic analysis, ERC economists were able to predict how changes in various proposed tax policies will alternately create additional, or threaten existing, jobs in Wyoming. Wyoming Liberty Group CEO Jonathan Downing said, "Wyoming Liberty Group is pleased to be able to provide the hard facts, data, economic research, and analysis of various public policy solutions to Wyoming's budget crisis, which have been sorely needed in years past. With this new information and dynamic model in hand, policymakers will have the tools necessary to make fiscally-sound decisions as they address the state's budget issues."
The ERC's model unfortunately reveals that the problems may be even worse than anticipated. Excluding transfers from state savings, Wyoming revenue collections have fallen ten percent per person over the last decade in real dollars. The reports praise Wyoming's sensible tax policy that taxes consumption more than personal income or investment. The report's modeled policy scenarios included increases or decreases to the franchise tax, sales tax, severance tax, and an increase in exports. The economists also included a creation of a personal income tax, with the assumption that Wyoming's constitution changed to allow such a tax. The model showed that an effective increase in the sales tax of .5% (through removing exemptions) would result in the loss of nearly 1,000 jobs and a reduction of $15 million to the state economy over the next two years.
ERC lead economist and report author Dr. Orphe Divounguy stated of the results, "The Wyoming economy faces some tough challenges due to the downturn in the energy market. Wyoming policymakers should consider tax reforms that encourage investment and growth. One of the best pro-growth policies would be the elimination of the franchise tax, which significantly affects investment. One of the worst policies would be the creation of a state income tax. A new income tax would cause even more severe problems for the Wyoming economy and would reduce state GDP and job creation."
To read the full reports: