Wyoming Economist Says Lawmaker Panic Could Lead To Income Taxes
An Economist with the Wyoming Liberty Group says he thinks a combination of a 2020 budget deficit in the range of $1 billion and a possible economic recession could panic Wyoming lawmakers into passing both a corporate and a personal income tax in the 2020 budget session of the Wyoming Legislature.
Sven Larson, who is based in Cheyenne, says he predicted several years ago that the state could face a budget deficit in the $1 billion dollar range in 2020.
He goes on to say he thinks the situation could be made worse by an economic recession which he is predicting for the United States later this year. While Larson says the national recession will probably be of about average severity--and not nearly as bad as the ''great recession" of 2008--it could hit Wyoming much harder.
Larson says that will mean a decline in state tax revenues of perhaps 4 or 5 percent. He says the combination of an already large budget deficit with declining revenues could send lawmakers into panic mode, leading them to consider large-scale tax increases. He says that could include both a corporate and a personal income tax.
A personal income tax was proposed during the 2019 legislative session but garnered little support and ended up dying in committee. A proposed corporate income tax targeting large out of state retailers--House Bill 220--passed the Wyoming House but failed to win Senate approval despite widespread support among legislative leadership.
Many opponents expressed concerns that the bill would be only the first step in the eventual implementation of across the board income taxes in the Cowboy State, Larson says implementation of large-scale tax increases in the scenario he describes would be a ''recipe for disaster."
He says what is needed instead is a policy of solid structural spending cuts. But he isn't sure that state lawmakers will be willing to make the kind of spending cuts that will be needed.