⛔ Deep Dive: Will Prices Go Up? Easing Your Concerns

🏛️ SEAL SD Addresses Price Fears with the Core GRT Plan

At SealSD.com, we know South Dakotans are concerned about whether the Core GRT Plan—part of the Maximum Liberty Plan (Plan 2)—will cause prices to rise. This plan replaces all state taxes with a single 5% Gross Receipts Tax (GRT), generating $3.6 billion and saving you $3,000–$5,000 annually by eliminating property taxes. A common fear is that businesses will pass the GRT onto consumers, driving up prices. The short answer? Not much. Business property tax savings usually outweigh GRT costs, and essentials stay exempt. Let’s dive deeper with detailed examples, reasoning, and analogies to ease your concerns and show why the Core GRT Plan keeps prices manageable while delivering massive savings.

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🔍 Understanding the GRT: How It Affects Prices

The Core GRT Plan replaces all state taxes (sales taxes, property taxes, and other fees) with a 5% Gross Receipts Tax on business revenue, totaling $3.6 billion:

• Businesses Pay the GRT: Unlike sales taxes, which you pay directly at checkout (e.g., 6.5% combined rate, or $2.60 on a $40 purchase), the GRT is paid by businesses on their total sales ($72 billion state-wide business revenue base). Businesses may pass a small portion of this cost to consumers, but it’s typically less than the old sales tax.
• Estimated Pass-Through: Economists estimate businesses might pass on 20–50% of the GRT to consumers, depending on competition and market dynamics. For simplicity, let’s assume a 2.5% pass-through rate—half of the 5% GRT—meaning a $40 purchase might see a $1.00 price increase.
• Comparison to Sales Tax: The current combined sales tax rate (state + local) averages 6.5% in South Dakota. On a $40 purchase, you’d pay $2.60 in sales tax. With the GRT, that drops to $1.00 (2.5% pass-through), saving you $1.60 per transaction.

Analogy for Clarity: Think of the old sales tax as a $2.60 picnic snack fee you paid directly—now, the picnic organizers (businesses) pay a $5 picnic cake fee, and they might ask you for $1.00 to help cover it, saving you $1.60 each time you grab a snack!

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💰 Why Prices Won’t Rise Much: Business Savings Outweigh Costs

Businesses save significantly under the Core GRT Plan, primarily through the elimination of property taxes, which reduces their need to raise prices:

• Property Tax Savings: Businesses save $5,000–$50,000 annually on property taxes. For example, a small retail store in Rapid City with a $500,000 property saves $7,500 yearly (1.5% rate). A larger business with a $2 million property saves $30,000.
• GRT Costs: For that same Rapid City store with $500,000 in annual sales, the 5% GRT costs $25,000. If they pass on 50% ($12,500), that’s a $1.00 increase on a $40 sale. Their net gain is still $7,500 (property tax savings) – $12,500 (GRT pass-through cost) = a loss of $5,000, but competition often prevents full pass-through.
• Market Dynamics: In competitive markets like Sioux Falls, businesses are likely to absorb more of the GRT to keep prices low. A coffee shop competing with Starbucks might pass on only 20% of the GRT (1% price increase), meaning a $5 coffee costs $5.05 instead of $5.33 under the old sales tax (6.5% rate).
• Impact: Businesses’ property tax savings ($5,000–$50,000) far exceed the GRT costs they might pass on ($1.00 on a $40 sale), keeping price increases minimal.

Analogy for Clarity: Businesses used to pay a $7,500 picnic spot fee—now they pay a $25,000 picnic cake fee but might ask you for $12,500 of it. They’re still ahead, so they don’t need to charge you much more for your picnic coffee—it’s like going from $5.33 to $5.05 for a cup!

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🛒 Essentials Stay Exempt: Protecting Your Budget

The Core GRT Plan ensures that essential goods and services remain exempt from any price increases, protecting your budget where it matters most:

• Exempt Items: Groceries, healthcare, prescription drugs, and utilities are 100% exempt from the GRT. For example, your $100 weekly grocery bill at Lynn’s DakotaMart in Hot Springs stays at $100—no GRT pass-through.
• Non-Exempt Items: For non-essential purchases like dining out, clothing, or electronics, you might see a small pass-through cost. On a $50 meal at a Sioux Falls restaurant, a 2.5% pass-through adds $1.25, compared to $3.25 with the old 6.5% sales tax—a $2.00 savings.
• Annual Impact: If you spend $500 monthly on non-exempt items ($6,000 yearly), a 2.5% pass-through adds $150 annually. Meanwhile, you save $4,500 on property taxes for a $300,000 home, leaving you with a net gain of $4,350.

Analogy for Clarity: Your picnic groceries are free—no extra picnic fee! For a picnic meal, you pay $1.25 instead of $3.25, saving $2.00 each time, so you can enjoy more picnic treats while keeping $4,350 more in your picnic wallet!

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💡 Easing Fears: Real-World Examples and Reasoning

Let’s look at a few examples to show why price fears are minimal and how the Core GRT Plan benefits you overall:

• Example 1: A Family in Aberdeen: A family with a $250,000 home saves $3,750 annually on property taxes (1.5% rate). They spend $400 monthly on non-exempt items like dining and clothing ($4,800 yearly). A 2.5% pass-through adds $120. They also get $400 in residency rebates (couple, $200 each). Net gain: $3,750 (property tax savings) – $120 (GRT costs) + $400 (rebates) = $4,030. A $120 price increase over a year is just $10 monthly—less than a pizza night—while they keep $4,030 extra.
• Example 2: A Senior in Watertown: A senior on a fixed income owns a $150,000 home, saving $2,250 yearly (1.5% rate). They spend $200 monthly on non-exempt items ($2,400 yearly), adding $60 in GRT pass-through costs. They receive a $200 rebate. Net gain: $2,250 – $60 + $200 = $2,390. That $60 yearly increase is $5 monthly—less than a coffee—while they save $2,390.
• Reasoning: The GRT pass-through is minimal because businesses save more on property taxes than the GRT costs them, and competition keeps prices in check. Plus, your property tax savings and rebates far outweigh any small price increases, giving you more financial freedom.

Analogy for Clarity: Worried about picnic prices? It’s like paying $5 extra a month for picnic snacks—less than a lemonade—while you save $2,390 on your picnic spot and get a $200 picnic gift card. You’re still $2,390 ahead to enjoy the picnic your way!

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🧠 The Psychology of Pricing: Does It Feel Cheaper?

You might notice that prices seem lower under the Core GRT Plan because taxes aren’t always visible on your receipt, creating a psychological effect that eases the perception of costs:

• Example: Buying a TV in Rapid City: You see a TV on the shelf for $350 at a store like Walmart. Under the old sales tax system, you’d pay $350 + $22.75 (6.5% sales tax) = $372.75 at checkout, with the tax clearly shown on your receipt. With the Core GRT Plan, the store might include a 2.5% pass-through in the shelf price, so the TV is listed at $358.75 ($350 + $8.75 GRT pass-through). At checkout, you pay $358.75, and the receipt shows $358.75 with no additional tax line. You don’t see the $8.75 GRT pass-through—it’s baked into the price—making it feel like you’re paying less, even though the total is $358.75 versus $372.75 previously.
• Psychological Effect: Retailers like Walmart often use pricing strategies to make costs feel lower—$2.94 or $0.98 feels cheaper than $2.99 or $3, even though it’s just pennies less. The GRT pass-through works similarly: not seeing the tax on the receipt reduces the “sticker shock” of an added fee at checkout. You see $358.75, not $350 + $8.75, so it feels like a better deal, even though you’re still paying the pass-through cost.
• Are You Correct?: You’re absolutely correct—there’s a psychological component at play. The hidden nature of the GRT pass-through makes prices feel lower because you don’t see the tax as a separate line item, similar to how $2.94 feels cheaper than $3. This perception can ease fears about price increases, as the total cost ($358.75) is still less than the old sales tax total ($372.75), saving you $14 overall on the TV.
• Impact: This psychological effect, combined with actual savings, makes the Core GRT Plan more palatable. You save money ($14 on the TV), and the lack of a visible tax at checkout reduces the mental burden of seeing an added cost, making purchases feel more affordable.

Analogy for Clarity: Buying a picnic TV used to cost $372.75, with a $22.75 picnic fee slapped on your picnic receipt—ouch! Now, the picnic price is $358.75, baked into the picnic tag, so you don’t see the $8.75 picnic fee at checkout. It’s like seeing a $2.94 picnic snack instead of $3—it feels cheaper, even though it’s just pennies less, saving you $14 to enjoy more picnic fun!

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🌟 Why It Works: Overall Financial Freedom

The Core GRT Plan ensures that any price increases are small and manageable, while delivering significant savings and benefits:

• Net Savings Outweigh Costs: Even with a $60–$120 yearly price increase, you save $3,000–$5,000 on property taxes, plus rebates, netting thousands in annual gains.
• Essentials Protected: Your grocery, healthcare, and utility bills stay untouched, so your core budget remains secure.
• Economic Stability: Increased disposable income ($1.6 billion state-wide) boosts local spending, supporting businesses and keeping prices competitive.
• Psychological Ease: Not seeing taxes on receipts reduces the mental burden, making purchases feel more affordable, even with a small GRT pass-through.

Analogy for Clarity: The picnic might charge $5 more a month for extras, but you save $3,000 on your picnic spot and get $200 in picnic gift cards—your picnic budget is $3,195 richer, your picnic groceries are still free, and the picnic price feels lighter without a big picnic fee on your receipt!

📂 Learn More

• 🌄 Our Vision for South Dakota
  The future we’re building — bold, free, and family-first.
• 📊 End Property Tax: GRT Plan
  How the 5% Gross Receipts Tax will replace property taxes — and why it works.
• 📈 Revenue Verification
  Ensuring every dollar is accounted for — transparency you can trust.
• 🛡️ Safeguards to Protect Homes
  No tricks, no traps — just locked-in protections you can count on.
• 🕵️ SD-DOGE: Our Government Watchdog
  Efficiency, oversight, and a watchdog that works for the people.
• 👉 Get the Facts
  Will Prices Go Up?: Debunk myths about price increases under the GRT.
• 🚜 Family Farms & Ranches
  How the GRT protects and empowers South Dakota’s agricultural backbone.
• 👨‍👩‍👧‍👦 For Our Kids’ Future
  Building a legacy of freedom and opportunity for the next generation.
• 🏛️ South Dakota First
  Prioritizing our people, our values, and our future — always.
• 🆕 What’s New?
  Stay updated on the latest developments and announcements.