CHEYENNE — Two Democratic lawmakers hope to launch meaningful income tax discussions in Wyoming with the introduction of new legislation.
House Bill 233, introduced Thursday, would impose a 4 percent tax on residents and corporations earning more than $200,000 in taxable income a year.
Sponsors of the bill say the tax would raise an additional $208 million annually for the Wyoming Department of Education’s School Foundation Program, which oversees public school funding.
This would undoubtedly solve the state’s education funding woes, said Sen. Chris Rothfuss, D-Laramie, who is sponsoring the bill alongside Rep. Cathy Connolly, D-Laramie, as the Legislature addresses a $200 million K-12 funding deficit.
“If this bill were to pass, 1 percent of the state would be affected, and we’d solve the education problem,” he said. “A tax structured something like this means most people in the state wouldn’t even need to file.”
Those making less than $200,000 would be unaffected by the changes, Rothfuss said.
Representatives with the Wyoming Department of Education had not reviewed the bill for comment by press time.
Wyoming is one of only seven states without an individual income tax, so Rothfuss and Connolly want to combat the Legislature’s “knee-jerk” opposition to the idea.
They say new taxes would help stabilize Wyoming’s revenue streams, especially as leaders work to limit the state’s dependence on minerals.
But many are wary, and similar bills proposed during the 2018 session died quickly on the House floor.
“There’s a lot of resistance to any type of new taxation or revenue,” Rothfuss said. “We can’t have informed discussions about it because there’s concern that a legislator’s seat will be in jeopardy if it appears they are supporting a specific type of tax.”
Those historically against the idea maintain it’s bad for business and misrepresents Wyoming’s values.
But Rothfuss said the tax is progressive – only affecting the top 1 percent of residents – while other proposed taxes would hit everyone.
“Things along the lines of grocery taxes … they end up putting a higher burden on lower-income people as a portion of their overall income,” he said.
If passed, the tax would begin in 2021 for income earned in the 2020 tax year.
By Chrissy Suttles
Wyoming Tribune Eagle Via Wyoming News Exchange