Montanans' acceptance of sales tax not here yet
Conventional wisdom guiding many sales-tax proponents over the years is that Montanans someday will embrace a sales tax as the lesser of evils. That is, a sales tax would be preferable to Draconian cuts in state spending. According to this theory, the only reason we don't yet have a sales tax is because threatened budget cuts in the past haven't been severe enough.
Then there's the fairness gambit. The notion here is that Montanans will someday accept a sales tax if it provides the opportunity to stick it to the people who don't pay their fair share of taxes. This school of thought suggests enacting a sales tax is largely a matter of finding the right target.
Both of these notions are being tested again in Helena, as the Legislature hacks its way through competing sales tax proposals. Neither notion holds water. Even if lawmakers and the governor succeeded in their efforts to ram a sales tax through this session, voters almost certainly would repeal it.
The idea that Montanans will accept a sales tax to avert budget cuts might work if the new tax ever were needed to avoid budget cuts, rather than simply to ensure budget increases. Taxpayers tend to be pretty good at math - heaven knows they get enough practice. The take-a-sales-tax-or-else line has worked to some degree on groups dependent on public spending, such as the teachers' unions. But, frankly, the ''or else'' has never seemed all that awful to most people being asked to pay $1.04 for things that cost $1. Besides, it's been impossible to overlook the fact that nearly all of the states that have sales taxes are in no better shape than Montana - and many are worse.
Will the consequences of balancing the budget for the next two years without increasing taxes cause people to change their minds? We doubt it, but we're willing to find out.
How about the appeal of shifting tax burden - say, to tourists, as the governor proposes? Anyone who can do basic math knows that people who live here buy a lot more taxable items than people who merely visit. Besides, the notion that tourists aren't paying taxes is wrong. Existing taxes glean money from tourists, albeit mostly indirectly.
The most recent figures we found are from a 1998 study by the University of Montana Tourism and Recreation Research Institute. It pegged wages paid to tourism-industry workers at $400 million, with another $56 million in income reported by tourism proprietors. There was another $135 million in property income. Income and property values reflect tourism, and we collect taxes on those things - not to mention accommodations, gas and alcohol taxes and recreation fees.
A variation of the tax shift is the notion - also part of the governor's play - that enacting a sales tax will make it possible to relieve people of other tax burdens. This probably is the strongest argument for a sales tax. However, the group of people who would pay more in sales tax invariably is larger than the group of people who would be relieved of other taxes, which makes enacting a sales tax difficult using democratic procedures. It's far easier to impose new and higher taxes on minorities, such as smokers, gamblers and the well-to-do. Additionally, taxpayers have been conditioned to be a little skeptical of promises about lower taxes. They tend to suspect any offsetting income or property tax decreases would be rather short-lived.
Perhaps Montana will have a sales tax one day. But that day still seems a ways off.