Currently, Montana is earning money through property, income, and selective sales taxes. Montana is also receiving close to a dollar and fifty cents for every dollar sent to the federal government (Weaver). This money is being used to provide for the public health, safety, and well-being, mainly through the forms of repairing and maintaining roadways, K-12 and higher education, supporting Malmstrom Air Force base in Great Falls, and proving welfare for those who qualify (Weaver).

Somewhere near 65% of the revenue created through property taxes is used for education; the rest is used to run local government, including snow plowing and garbage pickup. This amount needed for education is growing quickly, while the amount needed to run local government remains approximately the same, so additional revenue is now necessary (Weaver). Most of one’s income tax is being used to fund the state government and its numerous programs. Finally, there are selective taxes on gasoline, lodgings, and alcohol and tobacco (known as “sin taxes”). The taxes from the gasoline, plus matching federal funds, are used to repair and expand the state’s

The point is clear: Montana’s economy is in need of a metaphorical face lift while the state is in need of additional revenue. However, no one wants their income or property tax to be raised. For the state to reach this goal, a sales tax, with few exemptions, should be implemented as soon as possible and tax relief may have to tax a backseat to this economic development for the time being.

Of the sales tax proposals that have been submitted to the legislature over the past few years, they have all had strings attached, either in the way of adjusting other taxes, or in exemptions for certain items. Laslovich commented that to implement a sales tax, other taxes would “absolutely need to be lessened because Montana state income tax is one of the highest in the country; property or income tax needs to be eliminated or both have to be lowered.” Actually, Montana’s income tax is 11% of their salary, but because it is federally tax deductible (meaning that the money paid federally is subtracted from the salary before the state tax is taken) the effective marginal rate of taxation is only 5.4% (Young). Carney is more concerned over the exemptions that a sales tax may entail. “Those items exempted from the tax are arbitrary and depend largely on political pull. Groceries should be exempt but what constitutes food? Should lobster be exempt but not pizza? Why were newspapers exempt in the last bill?”

Considering how far below the national average Montana is in taxes paid and considering how much additional revenue needs to be generated for economic development, maybe it is for that four percent cap to be taken off the books and for Montana to get real about tax reform.

Representative Eileen Carney from Libby feels very differently. “I do not support a sales tax; I have written articles against a sales tax in the past.” She believes that the additional tax would help only the wealthy. “All the bills that have been proposed lessen property or income taxes to implement a sales tax. Since the poor currently pay little of these taxes, a sales tax shifts the burden onto the poor.” Carney also points out that “if a person of modest means wanted to make a major purchase, they would have to borrow money to do so. The tax is due at the time of purchase and they would be paying interest on the taxes they owed, whereas the wealthy could pay the tax outright to avoid this additional burden.”

The two primary goals of the current administration and legislation in the state have been to spur economic growth to increase state revenue while providing tax relief. The Republican and Democrat parties differ in their plans to achieve these goals (Taxpayer). Democrats wish to reduce homeowner property tax to increase the disposable income for all, which then the homeowner will use to spend in the economy. As the profit margins for business are increasing, the bus

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