Gianforte Releases '406 Tax Relief' Plan
Republican gubernatorial candidate Greg Gianforte unveiled his tax plan Monday afternoon at a lumber yard in Clancy. Standing in front of chest-high piles of timber and two large loaders, the Bozeman entrepreneur promised to get rid of Montana’s business equipment tax, lower income taxes for everyone, and not increase state spending.
“For the average Montanan the unfortunate reality is that Montana is at the bottom of our nation in wages. At the same time, we are seeing lower grain prices and cattle prices. We are seeing layoffs all around Montana.”
Much of Gianforte's early campaigning has hammered on what he calls business-suffocating regulations. His tax plan, which he is calling "406 Tax Relief," follows a similar theme.
“Let's start with the number four in our '406 tax relief' plan. I’ll phase out and eliminate business equipment tax over four years. Done, we've had enough. It should be over. As for the number zero in '406 tax relief,' zero stands for zero increase in state spending after inflation and some much needed infrastructure investments. We must slow the growth of state government and let Montanans keep more of their hard earned money.”
Gianforte also said the he would be against any implementation of a Montana sales tax. The final element of Gianforte's plan for state taxes includes an across-the-board cut in income taxes.
“With a maximum income tax rate of 6 percent, down from 6.9 percent today.”
Montana Department of Revenue’s director of Tax Policy and Research, Ed Caplis, says that reduction in taxes would amount to $125 million a year.
He says Gianforte’s plan to eliminate the business equipment tax would result in a $81 million a year in decreased revenue, revenue that now mostly goes to local governments and schools.
Caplis says in order for city governments and schools to not take on that funding burden, they would have to be reimbursed by the state general fund.
“In the past when we have reduced the tax rate on business, or class 8 property, we reimbursed them, or back-filed their loses. Otherwise, if you don’t reimburse, homeowners, businesses, the taxes that the business equipment folks paid would be shifted back on them.”
Gianforte says he would use general fund money to make up for the business equipment tax.
“And these details, what I’m laying out today, is a set of high-level objectives around where I would focus. The business tax is a cold blanket on investment. It hurts small business owners. That is where I would focus. And we are going to fund that as we have revenue to do that, and again, that is why we are doing it over four years.”
As Gianforte works to build his identity as the Republican Party’s candidate for the governor's seat, Patrick Barkey, Director of the Bureau of Business and Economic Research, says knowing what someone is or isn’t willing to spend money on is one of the best ways to get to know them.
“I think a budget proposal reveals priorities, and I think whether that is appropriate or not depends on what your or my priorities are.”
Incumbent governor Steve Bullock’s campaign manager, Eric Hyers, says Gianforte’s economic and tax priorities are not what is best for Montana.
“The fact is that under Steve’s leadership Montana is ranked the most fiscally prudent state in the country, he’s balanced the budget while maintain a rainy day fund and cut taxes for thousands of small and middle- sized businesses.”
The Montana AFL-CIO Executive Secretary Al Eckblad responded to Gianforte’s proposal in a written statement today.
“Greg Gianforte is supporting extreme legislation and pushing a tax plan that could cost Montana hundreds of millions of dollars while doing nothing to rebuild our crumbling infrastructure, invest in public schools, or create family-sustaining jobs.”
Last week Greg Gianforte started airing the first television ads in the governor’s race, Steve Bullock has not yet started doing so.