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 business is then paying a larger amount of taxes to the state and local governments. Though this plan seems to make sense, one must wonder if there is any relief for those who do not own their homes (Johnson). The 1990 census reported that close to 60% of those with incomes under $20,000 rent their homes (Census). These people have even less disposable income with which they can spend in the economy. Republicans believe that the business tax rate should be lowered in an effort to attract more businesses to the state. In the end, they are hoping that enough businesses will be in the state so that the lower rate still ends up earning the state additional revenue and that the growing competition between businesses will result in lower costs for the consumer (Montana).
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. .
Views on a State Sales Tax .
Montana simply needs more revenue. Lowering property or income taxes to achieve a sales tax is fairly pointless. The "three-legged stool" has come to describe a balanced state using all three taxes. If one leg is shorter than another, the stool will still fall. Taxing in one area simply to relieve another is pointless (Weaver). Contrary to popular belief that Montanan's are being "taxed to death," in actual dollars taxed, Montana is ranked 48th in the United States on State and Local taxes, at about $2,324 per capita.
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