Pushing a Sales Tax in Montana Won’t Work, Won’t Solve Problem

We had a great phone call from Stu in Marion on Monday morning's radio show. He spent a couple days volunteering at a political booth at the fair, and got to talk with folks from across the political spectrum. EVERYBODY was talking about property taxes, he told us.

Because of the rising property values, folks are seeing constantly rising property taxes- and we've been seeing that since the 90's if not earlier. If you ask me, that's why we need to scrap the way we base property taxes based off of the value of your home.

Some people think a sales tax will help solve the property tax problem, but a sales tax has not and will not get the support of the people of Montana if you ask me. Many of us simply fear that instead of lowering property or income taxes, local governments will just get their hooks in us with another tax and tax us even more. What we have now is not a revenue problem, but a spending problem.

Evelyn Pyburn with the Big Sky Business Journal was listening in on the chat Monday morning and sent me her take on the sales tax debate.

Pyburn: "There was a time when we went through this debate about a sales taxes before – under the Racicot administration – and all the same arguments were made. But the truth of the pudding came when someone introduced a bill in the State Legislature that would have established a sales tax with a cap, lowered property taxes with a cap, and placed a cap on income tax. That brought the whole issue to a screeching halt – the politicians (which were and probably still is a lot of Republicans) showed their true colors – it was NOT a lower property tax that they wanted it was another source of government revenue. Needless to say that bill failed and the subject was dropped until now."

Fast forward to today and Evelyn says "all the arguments remain the same and I dare say the outcome would be the same if we were to make the same proposal with caps."

Pyburn: "A sales tax does seem more fair, but when you understand that 'fair' is not what is really being sought, what many want is more money for government, then it loses the debate. Government should be able to do well with taxes capped as a percentage of production since it should grow the revenue it needs in step with growth of the population and economy. No one has ever explained in a very satisfactory manner why that isn’t possible. I believe those who support an UNCAPPED sales tax, in addition to an UNCAPPED property tax and an UNCAPPED income tax, are those who support unlimited government and businesses who are indeed weighted down by property taxes..." (she's referring to the larger out of state businesses with that part)