By Evelyn Pyburn

It’s been my observation that there is no tax that doesn’t eventually filter down to the individual citizen, and if they are a consumer, they are a taxpayer.

This isn’t a good thing or a bad thing, it just is. Businesses do not pay any kind of tax. While they may seem to pay them, in the end they have to pass them on in the price of their product to the consumer. If they don’t, they vanish as a business – they go broke, quit business, and cease to be a part of the picture. 

Taxes are not really paid on “tax day,” they are paid when the consumer purchases a product.

Taxes are consequential for businesses, only when they are looking for best locations in which to do business. But even then they are most consequential to the consumers and workers in the community, who benefit from the products, services, innovations and jobs that businesses bring.

There is no magic tax that saves the consumer.  There is only one way to lower taxes and that is for the government to spend less. Even if rich people pay higher rates, those tax inputs eventually reach the lowest rung of consumers in the prices they pay. 

It is especially vile when politicians attempt to dupe voters into believing that businesses are their enemy – that the individual’s taxes are high because businesses don’t pay their “fair share.” That is a favorite political mantra by political entities who do not want people to fully understand that the ONLY way to lower taxes is to lower government spending – bearing in mind that government has NOTHING that it doesn’t have to first take away from the citizens.

There are undoubtedly shifts in markets depending on what kinds of taxes are imposed. High property taxes reduce the number of homeowners. Rents increase.  High gasoline taxes reduce the amount citizens travel, but they pay them when they purchase groceries or products freighted into their community. High income taxes may encourage people to leave a community to work in a different state, which is also a price paid by the community. There may be some variance in every day transactions, but in the end, citizens are always the losers when taxes are high.

“Balanced” does not mean “lower,” which is how some people interpret the call for balanced taxes, and what the advocates want people to believe, and perhaps even believe themselves. But, not all that many people are fooled it seems, given a recent poll in which a majority of Montanans oppose adopting a statewide sales tax.

A sales tax has long been unpopular in Montana, where the basic taxes are income and property taxes. One has to believe it is because most people fully realize that it is really a call for more taxation, not property tax reduction, as is commonly claimed.

If Montana citizens ever had any misconceptions, they were given a clear lesson in the early-90s, when the last push for a sales tax was being made by many politicians. We needed a “three legged stool” for balance, we were being told. A sales tax would reduce property taxes, they said. And, while they were willing to put a cap on how high a sales tax might be – they were seen scrambling into the woodwork when it was recommended that a cap also be placed on property taxes and income taxes.

Montanans had routinely seen in neighboring states, how quickly and easily sales taxes were raised, and they were highly suspicious that the same was in store for Montana. When caps – especially on property taxes – were totally rejected in the state legislature, it made the truth of the situation clear. And, it is that which most Montanans see as the underlying reason for a sales tax.

If balance is what is being sought, then bring forth the legislation that would place real caps on all three taxes.

Caps on all taxation is actually the policy under which government – at all levels — should always function, if one looks at the realities of growth, which is usually the excuse given for more taxes. When a community grows it increases demand for goods, prices increase, and the number of pay checks increase. There are increases in every economic regard which should generate increased tax revenues at exactly the pace —  the set cap — that government should grow to keep pace with community growth.

That would keep government growth in check – which would also keep in check the power that government is able to exert over innocent citizens.

If one is really desirous of growing business and encouraging entrepreneurship, the Tax Foundation suggests that taxes on business to business transactions be exempt. The Tax Foundation warns that taxing business inputs results in “tax pyramiding” – taxing tax payments.

Business growth and a strong economy is a win- win for every one – even government, if indeed it is growing at a justifiable pace. Why should government grow if business isn’t growing or if citizens can’t make a living?

Adhering to policies that restrain growth in government with that of the economy would have saved the country from having any general sales taxes at all. It was during the Great Depression when citizens were starving, forced to abandon their property, leave their homes, and suffered a horrible plunge in the standard of living, that state governments decided that they shouldn’t have to endure the same suffering, and 44 of them enacted a general sales tax which burdened their citizens even more.

Montanans apparently decided not to do that. And, the case can truly be made the state has benefited from that decision ever since. There have been many studies and analysis of economic performance that have shown that states lacking one of the “three legs of the stool,” do better economically than they would with a “balanced” tax system. Those studies, in fact, demonstrate many times over that it is lower taxes that generate strong economies and better standards of living.

So let’s not scratch our heads in pretense that Montanans don’t know what is good for them. Most Montanans know EXACTLY what is good for them.


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