Finally, we are hearing some straight talk about the perception vs. the reality of Montana's taxes. The refreshing truth is being spoken by a high appointee of our Republican governor. David Gibson, the chief officer of the Montana Office of Economic Opportunity, recently completed a series of statewide meetings during which he was refreshingly frank about both where Montana's taxes actually rank relative to other Rocky Mountain states and, most important, about how the mistaken perceptions of our so-called high tax rates are harmful to Montana's important efforts to attract business.
Hindering recruitment Gibson has spent a lot of time examining Montana's tax rates relative to other states and has discovered an important fact: Montana's property and business tax rates are where they should be - in the middle of the pack compared to other Rocky Mountain states. However, Gibson also recognizes, and is determined enough to say publicly, that the reality of our actual tax rates is far different than the public perception, and that false perception is harming our state's effort to recruit new businesses and investors.
Gibson, in a recent telephone conversation with me, confirmed his findings that our corporate and property taxes are very competitive. He also, however, expressed his concern that "our income tax could be made fairer."
He was referring to the top marginal rate affecting people with taxable incomes of more than $75,000. Even there, however, the perception is worse than the tax; the stated rate is 11 percent but people earning enough to pay that top rate are actually taxed at only 6 percent.
I agree that our state's individual income tax should be fairer, but it's the people and families with incomes between about $25,000 to $50,000 who are paying too much. If anyone needs tax relief, it's those middle-income Montanans and, yes, that includes our small business owners.
The false perception about Montana's taxes has purposely been spread by the same crowd who throughout our state's first century and now into our second have made the demeaning claim that we Montanans are "anti-business."
All the way back to early in the last century, during the height of the shameful domination of Montana by a handful of corporations, the "anti-business" chant was heard. When our workers successfully organized against scandalous and dangerous work conditions, the sobbing began: "Montana is anti-business." When outraged, ethical journalists insisted that our newspapers should shed the yoke of the Anaconda Company's ownership and domination, the corporation squealed: "Montana is anti-business."
During the progressive political years of the late 1960s and '70s, our state wrote a new constitution, reformed state government, passed laws to repair our poisoned water, air and land from the outrageous corporate excesses of our past, while the critics preached: "Montana is anti-business."Tax breaks for business And when during those same years our governors and legislators moved to reform our tax codes and establish at least a modicum of progressive equity, the chant grew louder: "Montana is a high-tax state, anti-business."
During all of the 1990s and to the present, through three Republican governors and seven legislative sessions, Montana's tax rates have been continually cut, with the big corporations as the biggest recipients, and always with the promise of more jobs and a better economy … but incredibly, the anti-business chant continued. No matter what the Legislature has done to reduce taxes or make them fairer, whether it was in the last legislative session or our first one more than a century ago, the chant has continued and the loudest voices are always from those most able to pay or from the groups they hire to lobby for them.
In the past six years alone your state treasury has been plundered of more than $423 million with far too much of those tax breaks going to the well-to-do, who do not - emphatically do not - pay anywhere near the majority of taxes. The business equipment tax cut alone was scheduled to cost our state $65 million each year with a whopping 75 percent of those dollars going to a tiny handful of out-of-state corporations.
These self-serving, insulting slogans of "anti-business and high tax" not only demean our people, but they are worn, threadbare, and the public perceptions they have spawned are harmful to our state's continuing efforts to enhance and improve our economy.
Democrat Pat Williams writes from Missoula.