Robbing the poor to feed the rich

by: Yellowstone Kelly

Tue Feb 23, 2010 at 07:51:17 AM MST

It has legs.

Forty-five fellow R's, including twenty-one Republican legislator wannabes have signed on to it.

Here it is:

Oregon just raised it taxes on businesses. And Senator Jeff and 44 others say we need to advertise in Eugene and Ontario and Hines and elsewhere and entice businesses there to come to Montana because of our business-friendly tax climate.

To his and the R's credit, the rhetoric is, well, rhetorical:

Essmann said Oregon had taken a "higher tax path" to the detriment of good business. And while Montana's own tax system isn't perfect, he added, it does offer a favorable tax policy when compared to Oregon.

Among the advantages, Essmann named Montana's top marginal income tax. He said it helps small businesses retain capital and reinvest it, making it possible to expand and hire new employees.

"We need to leverage every competitive advantage we can," Essmann said. "We think now is the time, when we have a need for more jobs - and with small business in Oregon feeling under duress - to advertise the availability and the quality of our work force, and have Oregon businesses take a look."

So, what's going on? Jeff and his fellow travellers might need to review how the higher tax path was accomplished. By a vote of more than half of the state's registered voters.

Actually, there were two initiatives that passed. The Montana R's conveniently ignore the fact that the Legislature approved the tax increases last spring. Irate Oregonians took matters into their own hands and gathered enough signatures and place the tax increases on the ballot. By gum, we'll show 'em. Measure 66, which raises taxes on households earning $250,000 or more, passed by 54 percent. Measure 67, which increases corporate levies, passed with 53 percent.

Those damned, pesky voters.

So, now, let's see, Oregon bad. Montana good.  

Let's see: According to the R's, lower taxes on small businesses is a bad idea? But, Oregon businesses come on over anyway. (Hell, we might just snag a Nike along the way.)

So what about small businesses in Montana, which make up around 90 percent of the business base in the Treasure State, already struggling to get by? Senator Dave Lewis, always the gleeful companion of any idea that sounds good in a sound bite, suggests that we . . . . what is it?

"I think there may be some mid-sized or supply-type jobs there that may be looking at their options right now," Lewis said. "I'm sure we're going to be seeing our unemployment inch up in Montana."

Dave, do you suppose the "mid-sized or supply-type jobs" (What are these exactly?) might be tied to businesses that are location specific? Or, do they come to Montana and continue to service accounts in Coos Bay and John Day from Troy and Baker? Any concern about about how the additonal transportation costs might affect their competitiveness? And, if they can compete, do they compete against small businesses already providing the same type of "supply-type" services?  

Let's not forget Lewis' culpability in assisting with corporate tax giveaways by systematically understating the real costs of tax proposals that the Legislature approved while he served as Budget Director for Govenor Racicot. But, I digress.

As for the tax increase on rich Oregonians approved by Measure 66 , just remember this: In 2003, the Montana Legislature reduced the marginal tax rates and capital gains in an effort to lure wealthy folks to Montana. (The argument was that hundreds -- and perhaps thousands of Americans -- were just dying  to live here, but did not want to pay punitive taxes while bestowing their grace.) Since these changes went in to effect, they have cost the state treasury tens of millions of dollars more than the Budget Office of Judy Martz, the tax-cuttin Governor (R) from Silver Bow, estimated.

And, with net benefit to the state?

Doughnut.

Who benefited? The wealthy, landed gentry already residing here.

Ooops. That didn't work out so well either.

Essman and Lewis are correct. We need jobs. Lots of them. But, this sort of election-year pandering does little but create false expectations. My guess is that we can already start a Do you really believe that any business that is mobile enough tand tempted to move to Montana simply bacause of tax policies is going to stay in Montana after it gets a better deal from, say, Wyoming? Our business history is littered with examples of this sort and Lewis knows it.

Montana's workers compensation rates are high and we need to do something about it. In terms of overall workers compensation costs, we rank either first or second. And, who is first when we are second or second when we are first?

Oregon.

So, it is likely that a company doing business in Oregon is going to move to Montana to achieve a significant reduction in its work comp rates?

Montana has been savaged by job losses. But, building our economy is more involved than raiding our neighbors. Yes, we should to always be on the look out for opportunities to bring companies here. But, we should first focus on small businesses who are already here. It takes time. Certainly more than one newspaper article and the suggested advertising campaign.

But, in the end. There you have it. The GOP jobs proposal for this election cycle.

At least it has one.