Schweitzer

[HelenaCat95]

mquast - you hit it on the head. the past several legislatures have dealt with the income tax issue, and made it a little more competitive, but we have a long way to go. until then, there are many other states with a better business tax climate.

[iaafan]

I can't afford to buy anything, so I'm all for a sales tax. It looks like a good place to become Governor. Kind of like taking over as the new coach of a team that hasn't won a thing in 10 years.

[grizbeer]

Grizzh8r (or anyone): Not trying to be a smart ass, but what did Racicot do that was so liberal and had Montanans so enthralled? We went nowhere economically from what I can see. Not that that isn't a symptom of how our state is located and set up. Maybe there's some logic to why Montana is on the bottom.

Yeah the logic is our terrible tax structure. It is perhaps the most unappealing tax structure to new businesses in the West. Our state government is finally looking at it, but it needs a lot of work that won't get done over night.

We also need a damn sales tax. We have one of the highest income taxes in the country, but we don't have a sales tax when tourism is our 3rd largest industry. It makes no economical sense.

I think this might be a myth mq. In fact our tax structure is very conducive to people starting a business, because usually at start up you have losses, which can be written off against future income on your taxes. Compare that to say Washington which has no income tax, but local sales tax as high as 10%, tax on everything there is, and a business and occupation tax on gross receipts that has to be paid regardless if you make money or not.

Now granted Montana's tax system is not great if you have built your business up and are getting ready to sell it and are looking down the throat of those capital gains tax, but realistically most people who are smart enough to build up a business like that are smart enough to hire an accountant that can legally shield most of that income.

The people who really hate the income tax are the uber rich who have part time homes here. The could virtually avoid all taxes with the elimination of the income tax, because really what are they going to be buying in the state? It's not like you are going to catch them down at KMart buying underwear.

As far as tourist and sales tax, they are already taxed to sh!t using hidden taxes - gas tax, motel tax, car rental tax, airline tax, resort tax, alcohol tax, tobacco tax - they are paying all of this. Sure if we had a 5% sales tax we could pick up another $.75 for every souvineer T-Shirt they purchased, and if everyone bought one that might bring in another $3 million a year, but when you are talking about a $1.3 trillion budget, that ain't going far - face it if there is a general sales tax it will be 99% paid by Full-time lower income Montana residents and businesses. And only a fool would believe in 15 years we won't have the same income and property tax rate we have now (with certain exclusion for those with the money and power to get them) along with the sales tax.

If you think the income tax code is complicated and riddled full of special interest deduction wait until we get a sales tax - every group there is will lobby for exclusion - first up will be the non-profits, because they just can't survive if they have to pay taxes, then the tourist groups like professional outfitters - they will claim they are bringing the people into the state, so their purchases and sales should be tax exempt, since they are providing jobs - their argument will be they need to be tax exempt so they can compete with Canada, and then they will bring more people into the state that will spend more money, so the overall tax revenues will rise if they are tax exempt (if this sounds familiar it is the same logic the film industry used to pay no tax on films made in the state). In the end the only thing we will be collecting sales tax on is underwear sold at KMart.

There are lots of reasons why the state's economy is not as good as it could be, but it has little to do with the tax structure. My all time favorite argument is that the state's beauty and untarnished environment will be economic driver - what a crock - good paying jobs are based on industry, and industry isn't where it is beautiful- if that was the case New jersey would be the poorest state in the union, and Montana and West Virgina the richest. Sure rich captains of industry come here because of the beauty and fall in love with it, but they come here to buy the land and get away from their industry - the last thing they really want is more industry here. How many media operations does Ted Turner run from Montana (0). He moved here for the beauty, and hasn't brought any industry here (although he has started and contributed to several non-profits who have done their best to keep other industries out of Montana). The former CFO of Microsoft is a UM graduate and owns a large ranch in the 9 mile, yet no Microsoft operations here. Corporate executives are smart enough not to sh!t where they sleep.

[grizzh8r]

Grizbeer - very well put. I have heard others say this, but not as in depth and informative as you did.

so tell the farmers to stop selling their land

Show some respect man. We all know that the Ag industry (particularly small farming/ranching) is not the best paying job in the world. When a developer offers you an insaine amount of money for your land, what would you do? Continue to slog along in debt, barely making it? It is not like they have a choice. In this day and age, many can't afford NOT to sell out.

I grew up and still work on a Montana ranch. Most years we have been in the red financially. It has gotten better recently due to the Canadian border being closed to canuck beef because of the BSE scare, but that won't last forever.

If you don't want farmers and ranchers to sell their land to developers, then support COOL (country of origin labeling) and buy American made/raised products. Better yet, buy Montana made/raised products. Simple as that. And DON"T support WAL-MART. They hide behind their "All-American" facade, while 90% or more of their products are imported from out of country.


Sorry about the rant, but we are rapidly losing our agricultural base in the US and relying more on other countries for our food (and oil, and cars, and clothing, and labor, and, well, you name it.... ).

[hokeyfine]

grizh8r: my comment was sarcastic. i have no problem with farmers selling their land to make a buck. i was trying to point out to the other poster that it's not the out of staters fault or the land owners fault. it's a supply and demand thing. you're right, farming and ranching is a tough way to make a living, but don't confuse my comments with ripping on the little guy. if a guy offered me a million bucks for some land, you think i would turn it down?

[grizzh8r]

Hokeyfine-
I see. I thought you were being serious. I'm glad we concur. Plus, I just wanted to vent some frustration with the current state of Agriculture (not directed at you, of course), and hopefully enlighten a few people in the process.

[Grizlaw]

For those of you who don't like Montana's tax structure, you should give New York's a try. Fairly high state income tax, plus New York City imposes a separate income tax (my combined rate between the two was about 12% last year). Plus a sales tax (again, both at the state and city levels -- combined rate 8.something percent). We also pay tolls to use many of the major highways in the state, and tolls of $4 to $6 for all of the bridges and tunnels into Manhattan. (The tolls, incidentally, are common on the east coast, and are a good idea out here imho. A much lower percentage of the population has cars out here, and paying for road maintenance through user fees instead of from general tax revenue therefore makes sense.)