Oh, what a relief it is(n't): There is supposedly tax relief coming -- both temporary and permanent. "Key Senator" Jim Elliott, D-Trout Creek, has proposed a bill for property tax relief, but it needs a lot of work.
Montana Headlines still believes that the idea pushed by members of both parties to give tax credits to renters doesn't make much sense, since by definition, tax relief should go to those paying taxes. This amounts to a handout -- which is OK, just call it a handout and not tax relief. But then, we're not the ones having to get elected, so maybe we just don't have the proper perspective.
Likewise, the permanent tax relief provisions only apply to those with adjusted family incomes of less than $45,000.
The Great Falls Tribune reports that the median income for two-earner Montana families is $57,000. If this is true, then well over half of such two-earner families will get no property tax relief.
According to 2005 income tax data from the Montana DOR using adjusted gross incomes (which doesn't break things down by single or double incomes), 20% of Montana families will get no property tax relief. That same 20% of families, according to those DOR statistics, paid 75% of all income taxes in the state in 2005.
The idea that a family earning $46,000 -- or $446,000 for that matter, doesn't deserve property tax relief reflects an ignorance of who the truly wealthy really are. We'll give you a hint -- it's the people who don't have to get up every morning to go to work, and those people make more than that. A lot more. And they don't comprise 2% of the Montana population, let alone 20%.
And why should income determine who gets property tax relief, anyway? It would seem that what can justly be avoided are giving big tax breaks to expensive luxury homes. Why not cap the value of private homes that get tax relief at, say, the 80th percentile of home values in the region of the state, and exclude 2nd homes from receiving tax relief? Provisions can be made for the elderly on fixed incomes or for family farmers and ranches to make sure that they don't get taxed out of their homes as property values rise around them.
A lot of work needs to be done on this. One thing is certain, the property tax relief plan as Sen. Elliot proposes it is not at all worth making spending compromises over. Better to cut spending and put the excess in a rainy day fund than to engage in a tax-relief plan that is just for show.
The trouble is that there just isn't a lot of money to be taken from the truly wealthy because there aren't enough of them. You have to sock it to the mid-middle and upper-middle class in order to rack up the big tax bucks. As Clive Crook pointed out in a recent Atlantic Monthly article (sorry, dead-tree stuff again), the vast majority of Americans consider themselves to be middle-class -- which is why politicians seem eager to be perceived as catering to them (even while figuring out ways to sneak enough money out of the back pocket of the middle class in order to bribe 51% of likely voters into voting for them.)
Ask most people where the middle class stops and where being rich starts, and they'll usually pick a family income not terribly higher than what they themselves make. And as family income rises, that family's definition of where being rich starts rises as well. Simple human nature -- and more to the point, simple common sense, once one realizes that the level of wealth at which one doesn't have to get up and go to work every morning is very, very high.
Crook summarizes his article, subtitled "What War on the Middle Class?" by pointing out that the real war, both present and coming, is a war within the middle class over who gets to be the payee and who has to be the payer.
By excluding from property tax relief the 20% of Montanan families who already pay 75% of the income taxes (nearly all of whom are middle or upper-middle-class), a war within the middle class is being promoted. And does anyone other than selected politicians really want or need that in Montana?
Speaking about something actually worth spending part of a surplus on: At Montana Headlines, we're not at all fans of mandating what should be in health insurance policies, so some of the bills aimed at such measures are dying well-deserved deaths. But if we as Montanans can afford to provide basic health care to kids who can't help it if they are born into families who can't afford health insurance, we should fund CHIP and Medicaid.
Republicans shouldn't be afraid to fund these things, and Democrats should understand that funding today cannot mean funding forever, regardless of the health of the economy.
Another predictable failure on immigration reform: From the beginning of the session, Montana Headlines has maintained that we need a comprehensive package of immigration reform measures based on the hard experiences of other states.
These measures should address depressed wages for legal workers, concerns about having to provide welfare benefits for individuals here illegally, concerns about already overburdened schools having to absorb children of illegals, concerns about enforcing the rule of law, concerns about safety on our roads and highways, and concerns about the integrity of the voting process in Montana.
Attempts to pick something here or there to address are inevitably going to seem unfair to one group or another. The House overwhelmingly rejected a measure aimed at state contracts with contractors who employ illegal workers. The idea is a good one, but it placed too much burden on law-abiding contractors, in the opinion of both parties.
The burden needs to be shared between the state and private businesses when it comes to making Montana a friendly place for legal workers and an unfriendly one for illegal workers and those who would employ them. This means carefully written bills covering a broad range of measures -- this should not be a partisan issue.
