Wyoming economists say a state income tax is on the table if Prop 1 passes, because it’s a targeted way to get back the huge tax discounts the initiative would give wealthy people. “It\u2019s not a threat. It just makes income tax more logical,\u201d said Sen. Cale Case.<\/h5>\n\n\n\n
By Clair McFarland<\/p>\n\n\n\n Two economics Ph.D.s and a certified public accountant who have all served in the Wyoming Legislature say passing Proposition 1 could easily lead to a state income tax.<\/p>\n\n\n\n That\u2019s because the 50% residential property tax cut on qualifying home structures that Prop 1 offers favors Wyoming\u2019s richest county, Teton. Projections show Teton County residents will glean 24.7% of the cut\u2019s benefit though they comprise just 4% of the state population.<\/p>\n\n\n\n But applying an income tax to the wealthy could reverse that disproportionate benefit, because the Wyoming Constitution says people can credit their sales, use, and property taxes against any income tax imposed.<\/p>\n\n\n\n Sen. Cale Case, R-Lander, read aloud from the state Constitution\u2019s unique \u201ccredit\u201d clause during a Tuesday phone interview.<\/p>\n\n\n\n \u201cThis is a key point,\u201d said Case, who holds a Ph.D. in economics. \u201cThere is nothing that prevents Wyoming from putting in an income tax except our own will, and the fact that an income tax doesn\u2019t raise much money.\u201d<\/p>\n\n\n\n But slashing property taxes would also slash one of the biggest credits a person \u2014 especially a wealthy person \u2014 could leverage against his income tax, if Wyoming adopted one. So it makes an income tax look more worthwhile, said Case.<\/p>\n\n\n\n Lawmakers would be drawn toward taxing the highest incomes rather than lower ones anyway, said Case, because the latter won\u2019t generate much revenue.<\/p>\n\n\n\n \u201cRight now, we face our Constitution: (rich people) own property, and they would have big credits from their property taxes,\u201d said Case. \u201cBut here\u2019s the deal. Prop 1 gets rid of that. Now we can look at the possibility of an income tax just for the ultra-rich, for example. Or just people with $1 million or more (annual) income.\u201d<\/p>\n\n\n\n Case didn\u2019t say he\u2019s pushing for an income tax, but said it\u2019s worth considering in light of the credit system, if Prop 1 passes.<\/p>\n\n\n\n \u201cIt\u2019s real. It\u2019s not phony. It\u2019s not a threat. It just makes income tax more logical,\u201d he said.<\/p>\n\n\n\n Wyoming doesn\u2019t have personal or corporate income taxation.<\/p>\n\n\n\n It\u2019s been politically unpopular idea historically.<\/p>\n\n\n\n The Legislature advanced the income tax credit clause in 1973 and the voters ratified it the following year.<\/p>\n\n\n\n Former Rep. Mike Madden, R-Buffalo, is an economics Ph.D. who was so instrumental in developing the state\u2019s monetary distribution formula for local governments, the Legislature named it after him.<\/p>\n\n\n\n Madden told Cowboy State Daily on Tuesday that Case\u2019s theory that Prop 1 could tilt legislators toward an income tax \u201cmakes logical sense to me.\u201d<\/p>\n\n\n\n Former Rep. Jerry Obermueller, R-Casper, told Cowboy State Daily that Case\u2019s theory is \u201ccorrect.\u201d<\/p>\n\n\n\n The Revenue Committee examined the possibility of imposing income taxes in about 2017.<\/p>\n\n\n\n \u201cIt didn\u2019t really work because the property tax and sales taxes are a credit against the calculated income tax,\u201d he said. \u201cIf you cut property tax in half, all of a sudden the picture looks much more attractive to have an income tax at the highest level of income.\u201d<\/p>\n\n\n\n Obermueller, who was a CPA before his six years in the Legislature, opposes Prop 1. So do Case and Madden.<\/p>\n\n\n\n If it becomes law, the cut would apply to primary home structures of people who have lived in Wyoming for at least a year, and in that home for at least six months of the prior year.<\/p>\n\n\n\n A fourth economics buff, former Gov. Dave Freudenthal, wasn\u2019t as sure about Prop 1 rendering income taxes feasible.<\/p>\n\n\n\n \u201cAs a matter of theory, it\u2019s possible,\u201d said Freudenthal, who earned a bachelor\u2019s degree in economics before securing his juris doctorate from the University of Wyoming College of Law. \u201cBut I think the mechanics of it will defeat the idea.\u201d<\/p>\n\n\n\n For example, an income tax would leave individuals with the burden of tallying all their sales taxes, to glean the credit.<\/p>\n\n\n\n \u201cI think it\u2019s a theoretical possibility, and maybe a mechanical impossibility,\u201d said Freudenthal.<\/p>\n\n\n\n Like Case, Madden, and Obermueller, Freudenthal opposes Prop 1.<\/p>\n\n\n\n Freudenthal said during a Monday interview on Cowboy State Daily\u2019s Morning Show With Jake that his opposition isn\u2019t an ideological stance, but a pragmatic one. The former governor said he believes the Legislature should have adjusted its tax rate for funding schools downward during the COVID-era tax spikes, rather than leave the people to codify a permanent or semi-permanent solution via ballot initiative.<\/p>\n\n\n\n But as to Case\u2019s theory, the Legislature can study it if it hopes to find a way.<\/p>\n\n\n\n \u201cCale\u2019s smart enough, he can figure it out,\u201d said Freudenthal.<\/p>\n\n\n\n Wyoming assesses residential property taxes at 9.5% of home value, then multiplies that by the number of mills the state\u2019s schools, local governments, and special districts impose. Each mill represents the fraction 1\/1000th.<\/p>\n\n\n\n Taxpayers.net<\/a> ranked Wyoming 38th<\/u><\/a> for residential property tax rates, and USpropertystats.com<\/a> ranked it 41st.<\/u><\/a><\/p>\n\n\n\n But home values spiked during COVID, and residential property taxes followed.<\/p>\n\n\n\n Wyoming\u2019s residential assessed values nearly doubled from 2019 to 2024 \u2013 from a collective $5.86 billion to $10.15 billion. New homes, not just inflated value, likely drove some of that gain. <\/p>\n\n\n\n The numbers fell starting in 2025, down that year to $8.275 billion.<\/p>\n\n\n\n The Legislature acted, passing a 25% cut on taxes billed on the first $1 million in home value, an exemption for long-term residents over 65, and a 4% cap on annual property tax growth. Lawmakers also expanded the state\u2019s refund program.<\/p>\n\n\n\n Meanwhile, 30,251 people signed a petition to put an alternate 50% cut for qualifying home structures on the 2026 general election ballot.<\/p>\n\n\n\n Election Day is Nov. 3.<\/p>\n\n\n\n Despite the temporary spike, property taxes\u2019 overall trajectory has kept pace with inflation, Obermueller noted.<\/p>\n\n\n\n For example, Wyoming\u2019s mill levy income for funding K-12 schools sat at $280 million in 2019 and at $353.7 million in 2025, meaning that account jumped by 26.1%.<\/p>\n\n\n\n![\"Wyoming](\"https:\/\/cowboystatedaily.imgix.net\/Cale-and-houses-10.27.26.jpg?ixlib=js-3.8.0&q=75&auto=format%2Ccompress\")
‘It’s Real … It’s Not A Threat’<\/h2>\n\n\n\n
The Skeptic<\/h2>\n\n\n\n
Nuts And Bolts<\/h2>\n\n\n\n