Lawmaker proposes income tax increase

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North Dakotans will support higher income taxes if they know where the money will be spent, says a legislator who wants to raise $15 million for education, water projects and other initiatives.

Rep. Eliot Glassheim, D-Grand Forks, said an average North Dakota family would pay about $20 more annually in higher income taxes under his proposal.

The Legislature has several bills that would raise income, sales and motor fuels taxes. Glassheim's legislation was the first one Monday to get a public hearing, in the House Finance and Taxation Committee.

Most North Dakotans pay income tax rates that range from 2.1 percent to 5.54 percent of their taxable income. There are five tax categories, and people who make more money pay a higher percentage as their income rises.

Glassheim's legislation, HB1508, raises the lowest tax bracket from 2.1 percent to 2.2 percent, but has higher tax increases on larger incomes. The top tax rate, for example, rises from 5.54 percent to 6.04 percent in his bill.

"Some people think I'm a raving liberal, but I think I'm quite cautious," Glassheim said. "I have no lust to increase taxes, although some people might think so."

Rep. Dave Weiler, R-Bismarck, challenged Glassheim on the need for a tax increase. The state expects to have a $126 million surplus when its two-year budget period ends June 30.

North Dakota's state programs, such as aid to local schools, do not have enough money, Glassheim said.

"That is the reason why there's a lawsuit," Glassheim said, referring to a legal challenge to North Dakota's education finance system, which is pending in court in Williston.

A group of school districts say North Dakota's education finance system relies too heavily on property taxes.

"The higher the state contribution, the less the equity problems," Glassheim said.

No one testified against Glassheim's bill at Tuesday's hearing. The House will vote on the legislation later.

The bill is HB1508.

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