By Ross Peter Nelson and Cowboy
Bullock: “Our Montana Constitution needs to reflect our Montana values”
Governor Steve Bullock is proposing a constitutional amendment to prohibit a statewide general sales tax and allow Montanans’ voices to be heard at the ballot box.
“Montanans have rejected time and time again a statewide sales tax by large margins,” said Governor Bullock. “Our Montana Constitution needs to reflect our Montana values – and Montanans do not value a statewide general sales tax that hurts hard-working, middle-class Montana families who are already paying their fair share.”
Senate Bill 351, sponsored by Senator Dick Barrett, had its first hearing today in Senate Taxation. The bill proposes a simple change to Montanan’s Constitution to prohibit a statewide general sales tax and end the possibility that future legislators and Governors could impose a statewide general sales tax. If the amendment is approved by the Legislature, the people of Montana would be given the final say at the ballot box in 2018.
The proposed constitutional amendment would only apply to a statewide, broad general sales tax.
In 1971, Montana voters rejected a statewide sales tax more than two to one. In 1993, Montana voters rejected it three to one. Montana’s Constitution currently limits a statewide general sales tax to 4%.
Greg Gianforte, the multimillionaire running for the sole Montana seat in the US House Representatives, would like to pay less in taxes. While that’s not an uncommon sentiment, his preference is to transfer his tax burden to you and me.
During Judy Martz’s term as governor, Gianforte testified before the Income Tax Advisory Council that he would consider it “ideal” to “replace the current income capital gains rate with a sales tax.” To unpack how that would affect the average Montanan, consider the differences in the two taxes.
A capital gains tax is basically a tax on passive income. You buy a house and sell it 10 years later, the profit you made is a capital gain. Same with putting money into the stock market or into mutual funds. You park the money for a few years, and pay capital gains on the appreciation. There’s no work involved in those gains, just money and time.
On the other hand, a sales tax affects (nearly) every purchase in your day to day life. You need a new pair of jeans, you pay sales tax. You buy some camping equipment, you pay sales tax. Most states that have a sales tax will exempt food and medicine so as not to make it quite so rough on the very poor, but even with those considerations, sales taxes are regressive taxes; they hit the working classes harder than the well-to-do. Think about it, the rich may buy fancier clothes than you and I, but there are only so many hours in the day to shop, and if you’re jetting around the country on a private plane, those dollars spent won’t be taxed in Montana.
It makes no sense to run the state on taxes levied from the average person who buys a car to get to work or a computer for their child’s education, while people who have surplus funds to park in the stock market for a few years pay nothing on those gains. There’s no crime in making money as an investor, but to suggest that it shouldn’t be taxed smacks of bourgeois privilege.
In 1971, Montana voters rejected a statewide sales tax more than two to one. In 1993, Montana voters rejected it three to one. We certainly don’t need Gianforte and his ilk attempting to push it on us once again. There’s a better candidate for that House seat, rancher and singer Rob Quist.
Ross Peter Nelson is a playwright whose avocations include photography, hiking, and politics. Bio: https://rosspnelson.