The Montana Debate over Property Tax vs. Sales Tax: Using my Own Spending

Two words mentioned on a morning radio show will light up the phone lines and blow up app messages: property tax.  In the debate and griping, the suggestion is always made to replace this annual or semi-annual financial imposition with a sales tax.  And every time I heard it, I wondered if Montanans would pay more over the gradual long run with a sales tax.

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So over the weekend I looked at my personal numbers. The last property tax on my home is $1,273 for a full year.

Then I looked at the last year's credit card bills, because I use a card for purchases and yes, pay the bill in full each month.  Minus a couple automatic donations, here are my balances:

January: $1,213, with Christmas shopping

February: $886

March: $649

April: 1,229

May: $692

June: $748

July: $1,041

August: $815

September: $810

October: $751

November: $2,505, bought a computer

December: $948

Total: $12,287

I also buy with cash, about $200 a month.  So I add another $2,400 to the credit card balances for a new total of $14,687.

The Montana Constitution limits any sales tax to 4%, and I will almost guarantee that if the tax is implemented, the rate will just right to 4%.  So let's apply that rate:

$14,687 at 4% = $587.48

So yes, in my case, I would save money with a sales tax.  Your results may vary.

Wait, Travis, won't the state get less in tax revenue?

Good question.  Please remember that everybody in the state, everyone buying almost anything in the state, would pay the sales tax.  Property tax is currently levied only on property owners, beit residential, commercial or agricultural.  Assuming an additional person or two for every landowner, you could double or even triple my annual sales tax figure to match or surpass the present property tax bill.

Would a sales tax work for you?  I invite you to do your own math and let me know the results.  Email is travis.lee@townsquaremedia.com.  I look forward to hearing from you.

My view on a sales tax will be upcoming.  Stay tuned.