South Dakota Democratic Gubernatorial candidate Ron Volesky recently came out in support of enacting a corporate income tax. Since corporate income taxes are widely believed to fall most heavily on wealthy shareholders, enacting such a tax in South Dakota could add a useful bit of progressivity to a state tax system desperately in need of it. At present, South Dakota lacks both a personal, and corporate, income tax.
Volesky appears interested in using much of the revenue from a new corporate income tax to increase funding for education. He also has expressed an interest in using those revenues to provide property tax relief, or to eliminate the state sales tax on necessities such as food, clothing, and utilities.
Unfortunately, Democratic front-runner Scott Heidepriem, while reportedly "interested in hearing [Volesky's] theory," has stated that he remains opposed to the idea. From a purely political standpoint, this is unsurprising.
An income tax of any kind hasn't been seriously discussed in South Dakota since the 1970's, after a number of Democratic legislators who voted in favor of an ill-fated personal income tax plan lost their re-election bids.
But an awful lot of time has passed since the 1970s, and the world looks a lot different now. Volesky should be commended for taking this sensible, yet controversial position. It's time for South Dakota lawmakers to give the income tax a second look.