Why are we footing the bill for Wyoming’s billionaires?


One of these days, Wyoming won’t be able to depend nearly as much on mineral tax revenues to pay for its schools, roads, hospitals, and other public services and infrastructure. We will need to find other sources of revenue.

Admittedly, that day won’t be tomorrow — recent estimates show that investment gains by the state, along with an uptick in oil revenues, have all but erased Wyoming’s latest budget shortfall.

However brief this respite may be, it gives state lawmakers an excuse to perform their favorite tax reform-related activity: sitting on their hands and doing nothing.

But coal continues to wane despite changes in federal leadership, depleting one of Wyoming’s major revenue sources. Meanwhile, Wyomingites are working to diversify our economy in order to end the boom-and-bust cycle of mineral dependence. Many hope this process will also create new opportunities that keep young people from fleeing the state.

As we grow new industries in Wyoming, mineral taxes alone won’t be able to support the infrastructure they need to thrive.

Currently, mineral revenues cover somewhere in the ballpark of 65 percent of all Wyoming’s expenses. As that percentage shrinks — and as lawmakers find fewer and fewer ways to cut public services without harming our citizens — revenues from other sources will have to make up the difference.

The question, then, will be: Who pays?

That question —“Who pays?”— is also at the center of a report released last month by the Washington, D.C.-base Institute on Taxation and Economic Policy (ITEP). The report, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, looks at the different tax rates people pay in the United States across income brackets. Its results should help guide any conversation related to tax reform in Wyoming.

Unsurprisingly, ITEP’s analysis reveals that one group among us pays just about the lowest tax rate of anyone in America: Wyoming’s ultra-rich.

Jackson Hole’s billionaires pay a tax rate three times lower than most working Wyomingites. With average earnings of more than $2 million per year — and most that coming from “non-labor income” like investments — Wyoming’s richest One Percent pays an average tax rate of just 2.6 percent.

Meanwhile, the middle- and working-classes here sacrifice to taxes between 7 – 10 percent of what they earn.

Compare that to our neighbors in Montana. There, working- and middle-class folks pay a lower rate than they do here (between 6 – 8 percent), while Montana’s richest pay a much higher tax rate (6.5 percent).

The wealthiest Wyomingites also pay far less than the richest people in places like Oklahoma (6.2 percent), Alabama (5.0 percent), and Arkansas (6.9 percent), and they even pay a lower rate than One Percenters who live in other states that lack income tax, like Texas (3.1 percent) and Washington (3.0 percent).

It’s no secret that very rich people “live” in Wyoming in order to avoid taxes. Former Wyoming gubernatorial candidate and multimillionaire Foster Friess resides in Wyoming because it’s the prettiest tax haven he could find. Heirs to the Walmart fortune like 31-year-old multibillionaire Lukas Walton have long claimed Wyoming residency to dodge taxes, as have folks like Swiss philanthropist Hansjörg Wyss, who recently found an extra $1 billion lying around to donate to charity.

Most people can’t even imagine what it would be like to possess this kind of wealth.

You and I are concerned with things like mortgage payments, our children’s college tuition, saving for retirement, or that weird noise your car is making that might cost several hundred dollars to fix.

These types of worries wouldn’t even register for people like Walton or Wyss.

Yet, in each of the rare instances when lawmakers have discussed moving Wyoming away from mineral revenue dependence, they talk about things like raising sales or property taxes, or other types of hikes that would hit working Wyomingites hardest — while continuing to give the ultra wealthy an essentially free ride.

This is because the one type of common tax that would actually close the tax rate gap between what working Wyomingites and their billionaire “neighbors” pay is the tax people here hate most: income tax.

When — not if, but when — the day comes that Wyoming is forced kicking and screaming to give up some of its dependence on minerals, we’ll see if that hatred is strong enough for working people here to instead volunteer a bigger chunk of their own earnings, leaving the billionaires’ wealth safely intact.

Nate Martin was born and raised in Rock Springs. He’s worked 15 years in publishing, communications, and journalism. His writing has appeared in the Atlantic, VICE, al-Jazeera, High Country News, The Baffler, Wilson Quarterly, Wallpaper*, the Rocket-Miner, and other places. He also works as a wilderness guide.

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