Greg Gianforte Advocated Sales Tax, Outsourced Business from Montana

Shares

Since the Montana press is largely letting Greg Gianforte’s past vanish from the special election, we’re going to repost some of the most important stories from our coverage of him last year. Collectively and individually, they paint a picture of a man who will not represent Montanans in a way we can be proud of.

The hits just keep coming for Greg Gianforte. After a disastrous week that included the rediscovery of the fact that he sued to block public access to a river and his a clumsy effort to combat the terrible press that followed it, it turns out that his past contains another couple of damaging revelations, namely that he advocated a sales tax for Montana—and actually publicly talked about outsourcing business from the state rather than paying his fair share of taxes here.

In a 2002 story by Charles Johnson, the software executive advocated eliminating ALL Montana income and capital gains taxes, replacing them with a sales tax. From the Billings Gazette:

Gianforte’s solution is for Montana to eliminate its state income and capital gains taxes and replace them with a sales tax, which be ideal for encouraging high-tech business but he conceded was perhaps not possible to sell politically. Montana is one of five states without a statewide general sales tax and voters overwhelmingly rejected enacting sales taxes in 1971 and 1993.

That’s a damning collection of information. Arguing for the elimination of capital gains taxes is the kind of selfish argument that those opposed to Gianforte have long argued he favors, as it would disproportionately impact like Mr. Gianforte himself. The article notes that, at the time, Gianforte was worried about the tax hit he would face on an estimated capital gain of $10 million when he turned his company public. That’s hardly a concern for most Montanans, who probably don’t believe their taxes should increase to buy Greg Gianforte another massive home and more property he can use to block access to public waterways.

Back in 2013, the Montana Budget & Policy Center described the impact of SB 407, a bill that reduced the capital gains tax, and one that Mr. Gianforte testified in favor of:

Since its passage in 2003, the capital gains credit has cost Montana hundreds of millions of dollars that could have been invested in schools, families, and communities all across this state. Only a small percentage of Montanans benefited; 94% of the benefit went to the 20% of families making over $80,000 per year, while only six percent of the benefit went to the other 80% of families. Continuing preferential treatment for capital gains income is unfair to hardworking Montanans who earn their income through wages and salaries. We can no longer afford such a costly credit that benefits so few Montanans.

Even worse, Gianforte suggested replacing Montana’s income tax with a publicly reviled sales tax. A sales tax would be a deeply regressive assault on the poor, shifting the tax burden onto the working class in the state. Given Gianforte’s concern about wages, one has to wonder how he could support saddling those low-income workers with a sales tax rate that would likely add a minimum of 7% to the cost of every transaction, from groceries to prescription drugs. Texas, a state Gianforte approvingly cited back in 2002, has a sales tax rate of 6.25%, with many local governments adding an additional 2%.

Back in 2002, before he was a candidate for governor, Gianforte argued it would be a tough sell politically to replace Montana’s income tax with a sales tax. Now that he is a candidate, he claims to oppose a sales tax, but it’s hard to trust that he won’t turn around and try to impose a tax he favors if elected.

His support for a sales tax isn’t the only thing he revealed in the Johnson story. Upset that he somehow couldn’t “recruit world-class executives at salaries of $200,000 to $300,000” 14 years ago, Gianforte admitted that he set up a sham office in Texas to avoid paying them taxes in Montana. According to Gianforte:

Some said they couldn’t afford to move to Montana, so he set up a company office in Dallas because Texas has no state income taxes.

The average Montanan today, fourteen years later, makes just under $40,000 annually. Convinced that people making almost eight times that amount could not afford to live in Montana, Mr. Gianforte did what those who outsource do: he created an office in Texas for his “Montana company” to avoid paying taxes.

Greg Gianforte simply cannot be trusted: not to protect stream access, not to block a sales tax, and not to look out for the interests of average, working Montanans.

Originally published May 11, 2016

If you appreciate our efforts to hold Montana Republicans accountable and the independent journalism here at The Montana Post, please consider supporting our work with a small pledge.
Join a discussion of this (and all of our post) at our Facebook community page.

About the author

Don Pogreba

Don Pogreba is an eighteen-year teacher of English, former debate coach, and loyal, if often sad, fan of the San Diego Padres and Portland Timbers. He spends far too many hours of his life working at school and on his small business, Big Sky Debate.

His work has appeared in Politico and Rewire.

In the past few years, travel has become a priority, whether it's a road trip to some little town in Montana or a museum of culture in Ísafjörður, Iceland.

4 Comments

Click here to post a comment
    • No doubt about it. Once revenue crashes, an elected Governor Gianforte would argue for a sales tax to pay for the shortfall.

  • I really want to see an ad about his Russian investments. Yeah I know it is just a small part of some fund he has, but the way his campaign has lied and distorted Quists record and finances, I don’t have a problem with it. Apparently the voters in this state are that dumb, I have talked to a lot of people who say that Quist is going to push for gun control and that he does not pay his taxes, both lies pushed by the douche bags campaign. Negative advertising works, and since Gianforte is so unpopular the only way he can win is to destroy Quist, I say take the gloves off and give back to him everything and more.

/* ]]> */