Montana Viewpoint
We can hate taxes all you want, but we sure use what they buy without much guilt

July 24, 2006

Years back a doctor of my acquaintance let me know how he felt about government: “I think of all the taxes I’ve paid and what have I gotten out of it—a ride down the freeway.”

Well, to him the only visible reward for paying his taxes was the highways constructed and maintained by the money he paid in gas tax; but in fact, this guy had been a major recipient of tax dollars himself. He got paid with government money for seeing patients whose health care was covered by Medicare and Medicaid. We like to grouse about taxes, but we don’t grouse when it comes to the amount of economic good they can generate. Want an example? Just float the idea around town that the Forest Service Ranger District or local BLM office is shutting down. Never mind how much people may have complained about these government agencies before, their most ardent critics will be up in arms over the potential loss of money that is now spent in the local economy on groceries, pickups, and housing.

I know of one small town in Montana that may take the prize for being most dependent on tax dollars. Like most other communities they have a school, but they also have a hospital, a nursing home, a Forest Service Ranger District, and a large highway construction contractor. To their credit, they consider themselves fortunate, and they are. Oh yeah, and almost a quarter of their population draws a Social Security check which they spend locally.

It’s easy to overlook the economic benefits these tax-driven businesses bring to the community, because, as the saying goes, “you don’t miss your water till the well runs dry.”

My pop used to say that money doesn’t care who owns it. It doesn’t care who spends it, either, so whether it’s tax dollars or private dollars, they both all spend the same and contribute to the local economy in similar ways.

There are those who subscribe to a “free market” system who basically believe that if government gets out of the way—no taxes, no regulation—business will thrive. In part that is because they believe taxes are a hindrance to business success and that the free market will conform to consumer and societal needs because the profit motive serves as self-regulation.

What they fail to explain is how an adequate infrastructure of highways, public safety, education and health care, etc., will arise so that they can actually transact business. It’s hard to do with illiterate workers, bad transportation system, or public mayhem. That’s why Third World countries are…well, third world.

I suspect that what the Free Marketers are really counting on is the Free Ride. Let someone else pay the taxes that support the infrastructure. Want some evidence? Look at your property tax bill for the last ten years and compare it to any major industry’s tax bill. Theirs has gone down, ours has gone up. Between 1994 and 2005 local property tax levies increased by about 40% to take up the slack caused by tax cuts for big business (dams and power plant taxes cut 50%, oil refineries 66%).

Are we better off as a state? Beats me, because there’s no way to prove it one way or the other, but somebody’s going to say we are, and somebody’s going to say we’re not, and they’ll use the same numbers to “prove” it.

But however legislators feel about taxes, they are happier than clams at a clambake (don’t they always smile?) when it comes to taking what they otherwise fondly disparage as pork.


Jim Elliott
Phone: 406-444-1556
Mail: State Senate Helena, MT 59620