What do some Montanans think about the tax bill?

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December 1, 2017

Many media accounts have characterized opposition to the GOP tax bills pending in Congress as rooted in the so-called “blue states” – states such as California, New Jersey and New York.  After all, these states tend to be more supportive of important human needs programs like Medicaid, SNAP and the Affordable Care Act – programs that eventually could be severely curtailed if some iteration of the GOP proposals becomes law.
Too, taxpayers in some “blue state” tend to benefit more from their current ability to deduct their state and local taxes from their federal tax bill – and the Senate tax proposal would eliminate that option entirely.  So middle-income taxpayers in particular would be hard hit, having more money disappear from their pockets and, in some cases, seeing their home values decline.

But the truth is, taxpayers in blue states aren’t the only ones who oppose the GOP tax scams.  Only 60 percent of Republicans approve of the tax proposals, while independents and Democrats are firmly opposed.  And this week alone, we saw protests against the tax bill in places as red as Georgia, Kentucky, Nebraska, South Carolina, and Bastrop County, Texas.

Voices for Human Needs decided to take a quick browse through the newspapers in one red state – Montana – to see if we could get a glimpse of how some are viewing the tax cut debate.  We found:

Protests were held Monday and Tuesday in the Montana communities of Bozeman, Helena, Kalispell, and Missoula.

In Bozeman, there were actually two protests.  In one, graduate students at Montana State University walked out of their classes this past Wednesday to protest a provision in the House bill that would treat their waived tuition as income received by them and to pay income tax on it.  That would mean a $50,000 tuition waiver could force a student to come up with something like $10,000 in tax payments.  Graduate student Will Wright, 28, a doctoral student in history, told the Bozeman Daily Chronicle that he might have to drop out of school if the proposal is enacted.

“We make a pretty meager salary,” Wright said, discussing the long hours he works teaching undergraduates.  “For a lot of us, myself included, if the House version passes, it’s going to be a tremendous financial burden, and it may mean I exit graduate education.”

In Billings, the Billings Gazette reported that Montana’s wealthiest taxpayers will receive half of a $791 million pot of federal tax breaks proposed by Senate Republicans, with Montana’s remaining households splitting up the rest.

Citing figures provided by Montana’s Department of Revenue, the newspaper reported that the wealthiest 3.4 percent, or 15,300 households earning at least $196,575 a year, would receive $386.5 million of the tax cuts headed to Montana in 2018. The remaining $404 million would go to the state’s other 475,000 filers.  “The top 10 gets more than half the tax cut,” said Ed Caplis of the Montana Department of Revenue, a state agency.  (To get a sense of what that means, look at the Institute on Taxation and Economic Policy’s estimates of how much a middle-income Montanan would get out of the tax cut in 2027:  for those in the middle fifth that get a tax cut, it will average $60 a year, or a whopping $1.15 a week.)

At the same time, the Billings Gazette came out sharply against the Senate tax proposal in an editorial, calling it “easily the most un-Republican tax plan ever.”

“…We’d like think about the best of the Republican Party.  Here are some of the things that come to our minds — spending government money responsibly; smart business principles; compassionate care; and the understanding that more money in citizens’ pockets means more prosperity for everyone.

“That’s why it’s hard to imagine a bill more un-Republican than the one Congress is trying to rush through by the end of this week.”

Back in Bozeman

, letter-to-the editor author Deb K. Davidson argued that two-thirds of Montana’s congressional delegation – Sen. Steve Daines and Rep. Greg Gianforte, — are spreading myths that providing large tax cuts to corporations will jump start the economy:

“First, our national unemployment rate is at a historic low of 4.1 percent and Montana’s is even lower.  The problem with our economy isn’t jobs, it’s wages, which have been flat for the entire nine years of the recovery.  Second, history tells us this “trickle-down” argument is a myth.  It didn’t work when Bush cut taxes (we ended up with the Great Recession).  When Clinton raised taxes on the most wealthy a booming economy followed.  The economy did grow after Reagan cut taxes but his action was at the bottom of a recession, not at the top of a recovery as we are now.

“The other myth that Daines and Gianforte like to spin is that as corporations make more money from the tax cuts they will voluntarily increases everyone’s wages by an average of $4,000. What a crazy suggestion.  With higher profits corporations either will increase dividends to shareholders or invest in technology to improve margins, starting with ways to eliminate jobs through robotics.  In the meantime Daines and Gianforte will benefit from higher stock prices and eventually from escaping estate taxes, which already exempt all but the top 1 percent of Montanans.”

tax policy