Wyoming should rightfully be proud of the effort to encourage blockchain technology here.
After all, our political and business leaders have talked for years about the need to diversify our economy so that we are less dependent on the energy industry. Oil, coal and natural gas play an important role for Wyoming, but without a broader revenue base, we’ll be forever tied to the volatility of booms and busts.
Blockchain also represents the sort of entrepreneurship Wyoming needs to retain more of our young people, who too often leave for other states with newer, and more exciting, business opportunities.
That said, the excitement over blockchain is muted somewhat by a bitter truth: Wyoming’s tax structure is not set up to reap any revenue windfalls from the emerging technology. And until that changes, new businesses will offer the prospect of jobs, but without the revenue to fund the infrastructure needed to support new residents to our state. This has to change.
First, a brief description of blockchain. The technology is most synonymous with digital currencies such as Bitcoin, which, just like traditional money, can be used to buy and sell things. But blockchain technology is about much more than cryptocurrency. It’s essentially digital record keeping spread out over many computers. Because the information is stored across many devices, it becomes much more difficult for someone to commit fraud or theft. Given that, it could be used in a variety of applications where security and verification are important.
Some lawmakers wisely recognized that Wyoming, with its preferences for low regulations, would be well suited for such industries. They set about passing laws designed to make it easier for blockchain businesses to take root here. In the past two years, lawmakers have approved 13 blockchain bills, making it one of the most progressive states in the nation for the new technology, according to the Sheridan Press.
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All of that work is laudable – especially for a state more associated with cowboys and coal miners than online technologies. It’s exactly this sort of foresight Wyoming needs to finally achieve the economic diversification that’s been talked about for so long.
But to complete the puzzle, lawmakers must take one more step and change Wyoming’s tax system so that businesses that aren’t in the energy industry pay their fair share. This is hardly a radical opinion. Lawmakers on both sides of the aisle have acknowledged this reality.
What’s kept change from happening is fear. Lawmakers, especially lawmakers on the right, fear that by merely changing how we tax, they will expose themselves to a primary challenge. They worry about inane pledges that equate all taxes as the same, as if closing an obscure loophole is the same as establishing an income tax. Nonsense.
Where would we be today if lawmakers had been constrained by that same logic in 1969 when they were discussing and implementing Wyoming’s first mineral severance taxes?
Lawmakers have been wise on blockchain. With one more step, we can all reap the benefits of a state whose services aren’t dependent on only one industry.