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Fracking good times: North Dakota tops U.S. income gains

By   /   September 22, 2014  /   News  /   No Comments

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HIGHWAY TO WEALTH: Oil and gas are powering North Dakota’s nation-leading rise in personal wealth — despite personal and corporate income taxes.

By Kenric Ward | Watchdog.org

WASHINGTON, D.C. — North Dakota leads the nation in personal income growth. No other state even comes close.

From 2008 to 2012, North Dakotans’ per-capita income jumped 31 percent, according to the U.S. Bureau of Economic Analysis.

South Dakota came in a distant second, registering a 10 percent gain.

North Dakota’s 2012 per-capita personal income was $57,367, the highest for any state and just behind Washington, D.C.

Interestingly, North Dakota has an income tax, a corporate tax and a sales tax. It also has a fracking big oil and gas boom going on.

A Federal Reserve study issued last week showed North Dakota leading the nation in “progress toward recovery” from 2007 to 2013.

Graphic by Jason Sorens

NO. 1: North Dakota’s rise in personal income leaves other states in the dust.

 

While California grabs headlines for shrinking its bulging budget deficit, the Golden State continues to experience high inflation. This erodes any income gains and grinds down the middle class.

“High housing costs, driven up by regulations, and bigger growth in the cost of living mean lower real income,” explains Jason Sorens, a lecturer in economics at Dartmouth College and a policy expert at George Mason University’s Mercatus Center.

As a result, California’s inflation-adjusted income growth rose less than 4 percent over four years.

North Dakota’s energy bonanza has imported loads of jobs that pay six figures, along with unprecedented investment opportunities for Dakotans.

Mineral rights are minting a new generation of High Plains millionaires, as hydraulic fracturing (fracking) technology opens untapped petroleum reserves.

North Dakota’s triple taxation — personal income, corporate income and sales taxes — is an anomaly among high-growth states.

Even with that drag, Sorens and the Tax Foundation characterize North Dakota’s tax rates as “pretty low.”

“Fracking is obviously making a huge difference to their economy,” he said.

Most of the runner-up states are classified by Sorens as “relatively free.”

By contrast, laggards such as Illinois and New Jersey are “overall a much less free group,” burdened with higher taxes and job-killing regulations, he noted.

Though Nevada has no income tax, the Silver State posted a decline in personal income and placed dead last, as it continues to reel from the real-estate bust that began in the mid-2000s.

Kenric Ward is a national correspondent for Watchdog.org. Contact him at (571) 319-9824. @Kenricward

 

 

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Kenric Ward is the San Antonio-based reporter for Watchdog.org. A California native and veteran journalist who has worked on three Pulitzer Prize-winning newspapers, he received a BA from UCLA (Political Science/Phi Beta Kappa) and holds an MBA. He reported and edited at the San Jose Mercury News and the Las Vegas Sun before joining Watchdog.org in 2012 and previously reported from Virginia. Kenric can be reached at [email protected]