A better choice: The "Wyoming Tax Swap"
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Replace general sales tax, use tax, and business
personal property tax with simple, flat income tax on Federal AGI (approximately
3%) and corporate net income
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Retain excise taxes on gasoline, cigarettes, etc.
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If swap is revenue-neutral, Federal deduction gives citizens
an effective "rebate" of 15% of state and local taxes (Sales taxes aren't
deductible; income taxes are.)
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If state and local tax revenue is increased slightly,
state can balance budget and residents still pay less, overall, than
before
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Retail business relieved of overhead of collecting taxes
for state
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Capital investment, modernization no longer penalized
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Wyoming consumers rewarded for buying in Wyoming
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Consumers from Colorado, Nebraska, Utah, Idaho would travel
to Wyoming to patronize local businesses
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Tax base broadened to include out-of-state businesses
(e.g. utilities) which depend on infrastructure but do not pay fair share
of taxes
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State tax return would fit on a postcard.... Could be
submitted via a secure Web page due to Wyoming "electronic signature" law
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Income taxes are exportable as component of cost of goods
sold (Currently, we pay other states' "exported" taxes)
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