Guest column: Gianforte’s tax cuts? Montana has been there, done that - by Ken Toole Guest columnist

Found here. Our comments in bold.

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Mr. Toole is a leftist, a former state politician who found a cushy post-government job pushing leftist policy initiatives.

So it's no surprise finding him writing leftist agitprop consisting almost entirely of tired leftist talking points and bumper sticker slogans.

Nor is it a surprise he is opposed to returning tax money to its rightful owners. But he doesn't have a reason, he doesn't explain anything, and he can't tell us why the government is a better choice to spend your money. 

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The great thing about human beings is that we learn from past mistakes. Unless you are Gov. Greg Gianforte and his Republican allies in the Legislature. As the Governor rolls out his package of tax cuts, and legislators clamor to get on board, it seems that no one remembers the 2003 Montana Legislature and Senate Bill 407, Judy Martz’s big tax cut plan that failed to deliver on its promises.

But before getting into the lessons from Senate Bill 407, let’s refresh ourselves on the economic theory that is driving Republicans to promote big tax cuts for the wealthy. It’s called “trickle down” economics. (First leftist talking point. The only ones who call tax cuts "trick down" are leftists. It's a disparagement, not an economic term. That's what Leftists do, they wield epithets rather than explain ideas. They are unable to discuss or debate anything.)

The idea is to give tax cuts to wealthy people who will then hire more people and pay more taxes which will lead to a better world. (No, the idea is to return overtaxed money to its rightful owners, the taxpayers, regardless of how they might choose to spend it.) 

It turns out that cutting taxes on the wealthy just allows them to put more dollars into things like stock buybacks, offshore accounts, and other financial mechanisms that simply make them richer and do little for community investment. (We doubt if any Montanans do this. The author is simply copying and pasting leftist talking points without regard for their relevance. The National Committee for Leftist Agitprop does not seem to provide slogans that work at the state level.)

Even though most economists have debunked “trickle down economics,” (No one has debunked something that does not exist. And by the way, "most economists" means "economists that agree with me.")

Republican politicians cling to it as an article of faith and continue to promote it. (Irony alert. The author, redeploying leftist rhetoric regarding a former governor from 20 years ago, is the one clinging to a failed idea.)

Now, back to 2003 and Senate Bill 407. Judy Martz was the Governor, and Republicans held majorities in both houses of the legislature. Then as now, Republicans were supremely confident that tax cuts result in increased revenue by stimulating growth.(And that's what happened. But even if it didn't happen, the money still belongs in the pockets of those who earned it.

Notice the government-centric orientation. He thinks the goal of tax cuts is to increase revenue. For the author, everything revolves around government.)

So they passed significant reductions to capital gains taxes and the income tax rates paid by wealthy individuals.

Specifically, SB 407 reduced the tax rate on top income earners (that’s tax speak for rich people) (No, it's not. Rich people have a lot of assets. Top wage earners have lot of income. The two are not the same.)

from 11% to 6.5%. It also created a 1% tax credit for capital gains income (that’s tax speak for money people make selling things like stock and real estate). (No, it's not. It's leftist speak for people who have saved a little money in their 401k, or it's their house that is now too big for them during their retirement years.)

Sounding familiar? Gianforte is proposing to reduce the top income tax rate along with giving a tax credit to people paying capital gains taxes. (Good for him. The government should return excess revenue to the ones who earned it.)

But the real story about SB 407 is just how wrong the projections of the effect on public services and state revenue turned out to be. It ended up costing more than its promoters promised. Lots more. In 2011 the Department of Revenue conducted an analysis of the fiscal impact of SB 407. Among other things the analysis concluded that the cut in income tax turned out to cost more than three times the projections during the 2003 legislature. (Excellent. It worked even better than projected.)

The cost of the capital gains tax cut was double the projections. (Good. Get that money out of government coffers and back to the people to whom it belongs.)

That meant much less money available for schools, local governments, and basic public services. (Now the author turns to flat-out lying. Revenues INCREASED after the tax cuts: 

Montana’s general fund revenues began a period of unprecedented growth increasing by 9.4 % annually from FY 2003 to FY 2008.

Not surprisingly, the analysis also showed that the beneficiaries of these tax cuts largely turned out to be rich people. (For some reason it surprises the author that rich people pay most of the taxes, thus get more back.)

So, here we sit in 2023, just like 2003. Republicans control both houses of the legislature and the Governor’s Office. And just like 2003, these politicians seek to cut taxes mostly on rich people. But there is a big difference as well. In 2003 the state was facing a budget crisis. (A crisis solved by tax cuts...)

Thanks to Joe Biden’s American Rescue Plan Act, in 2023 we have a big budget surplus and, along with that, we have the opportunity to invest (Spend...)

in our institutions and infrastructure. While rural nursing homes are closing across the state, while the State Hospital is crumbling before our eyes, while cities and counties are struggling to make ends meet, while schools are hard pressed to find qualified staff, why would we make it a priority to give tax breaks to the wealthiest among us before those problems are addressed? (Why didn't previous Democrats fix these problems when they were in power? Why didn't Steve Bullock do something? What is our Democrat Senator John Tester doing about it? Why didn't the author himself fix it when he was in office?

The reason is, Democrats aren't interested in fixing these problems. They want the talking point to use rather than solve the problem.)

The answer from the Republicans is, “Just be patient. It will all trickle down.”