27 August 2018 — 0911 mdt

City leaders in Montana still want a local sales tax

Greg Strandberg, who writes the Montana Blog at www.bigskywords.com, is not universally admired by Montana’s Democrats. Many, frankly, hate his guts. On occasion, I’ve not always agreed with him.

Yesterday, he published 10 Montana Democrats That Want a Sales Tax, a post that names names and that will infuriate a lot of Democrats. It’s an excellent overview of the forces that are gathering to try to convince Montana’s legislature to approve a local option sales tax, such as is inflicted on the residents of Whitefish.

Proponents of this approach make two arguments. First, they assert that local government needs considerably more money to maintain or improve services. Second, instead of raising property taxes, they want to levy a tax on objects and services that they claim mostly would be paid for by out-of-staters.

In theory, the revenue from a local sales tax could be used to lower property taxes, or to provide a payment to property owners (who might be encouraged to share their windfall with renters). Local residents living outside the city limits but shopping in the city would pay the sales tax but not share in the property tax rebate.

In practice, the offset will disappear and the sales tax will be raised to its legal limit.

The progressive income tax is a much better instrument for raising more money, but Democrats in Montana, resigned to being a permanent legislative minority, have surrendered all hope of reversing the tax cuts made during the last Republican governorships. Now they hope they can find taxes that Republicans will like (there are none), even if that means slapping Montanans with a regressive tax such as a sales tax or a value added tax.

Strandberg has identified some of the Democratic sales tax ringleaders, and in doing so has performed a service for the voters and taxpayers of Montana.