Despite the assertions of some of our representatives, Wyoming is not the only state without a corporate income tax.1 Moreover, states are trending away from the corporate income tax. Forbes magazine recently discussed this trend in an article entitled, "2019 Became The Year That Republicans in Wyoming Started Acting Like Democrats In Washington".2
Some of our representatives also discuss that the proposed corporate income tax rate in HB220 would simply be us "reclaiming" what other states are taking from us. But let's play this hypothetical out. Lowes, for example, is incorporated in North Carolina, a state that seeks to reduce its 3% rate to 2.5% in 2019, falling in line the national trend of reduction. Meanwhile, HB220 seeks to increase from 0% to 7% and purport this to be a "reclamation"?
This is simple logic. Lowes will lose money coming to Wyoming. How will they handle this? Either they will cut employees, hours, wages or locations in Wyoming. Big business doesn't eat a loss without making it up elsewhere.
And how many Wyoming businesses could this impact? How many Wyoming employees? Even proponents of the bill have alluded that they are uncertain of the repercussions that Wyomingites may face and exactly how many people in our state this will impact.
A corporate tax will encourage companies to invest elsewhere or will carry significant economic consequences over to employees and citizens. To put it in perspective, Walmart, who is the biggest private employer in the state of Wyoming may cut salaries, lay off workers, or stop production and expansion in our state.
Raising the corporate tax rate would walk back any pro-growth initiatives and will undoubtedly hurt the citizens of our state. Instead, the Joint Appropriations Committee should practice prudent measures such as fulfilling their interim priority to simplify the budget process and review interim streams. Unfortunately, 2019 has been short on bills that even come close to looking at long-term fiscal solutions.
With a biennial budget of $9 billion dollars – shouldn't we know where all that money is going and why?
The real problem is spending, not revenue. We need transparency before taxes. Anything short of that will hurt the citizens of Wyoming.
1 Forty-four states levy a corporate income tax rate. https://taxfoundation.org/state-corporate-income-tax-rates-brackets-2017/