A bill that would have implemented a personal and corporate income tax to pay for education in Wyoming died in the House Revenue Committee on Friday morning for lack of a motion.

House Bill 233 would have taxed personal and corporate incomes above $200,000 at a rate of four percent. But because of a provision in the Wyoming Constitution, any income tax that would be implemented in the state would have to first credit taxpayers for all other taxes paid in the state.

Bill sponsor Rep. Cathy Connolly (D-Laramie) said in real terms that would mean that only people or companies making at least $350,000 would have to pay the tax. She also said her belief was that no one making less than $200,000 would even have to file a state income tax return.

But Wyoming Department of Revenue Director Dan Noble questioned her statement on the returns, saying it would be difficult to administer and enforce the tax if only those taxpayers filed returns.

Connolly said only 2,000 to 3,000 state residents would actually end up paying the tax, adding it would raise a total of roughly $200 million a year for Wyoming schools, essentially solving a looming budget shortfall of $350 million or so for each of the next two bienniums.

She said she was bringing up the income tax as an alternative to a proposal to reinstate a state sales tax on groceries, which she called a regressive tax that would hit poor state residents hard. But several people testified against the proposal.

Tom Schmit of Laramie, speaking as a private citizen, said every single state which has implemented an income tax is still facing funding shortfalls, adding there are also some very real questions about what "income" even is. Schmit also called the income tax an infringement on privacy and a "fine on productivity."

Former Laramie County Commissioner M. Lee Hasenauer, who is also a Republican Party activist, told the committee the state Republican Party is strongly opposed to the proposed income tax. Recalling his days as a commissioner, Hasenauer said that when the county lowered taxes revenues actually went up.

A straw poll of the committee found only three members of the nine-member committee were in favor of continuing further discussion of the proposal. After that poll, no one moved to support the motion, and it died in committee as a result.

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