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Taxes and Texas

Yesterday, Texas Governor Rick Perry revealed his innovative new budget strategy. He issued a proclamation asking Texans to pray to the Lord God Almighty to intercede in a budget crisis mostly created by Republican tax policies over the past decade. In asking citizens to pray for rain, Perry noted;

“These dire conditions have caused agricultural crops to fail, lake and reservoir levels to fall and cattle and livestock to struggle under intense stress, imposing a tremendous financial and emotional toll on our land and our people,”

What the Governor failed to note is that the bulk of the “tremendous” financial toll in Texas falls mostly on the poorer citizens of his state due to recent tax cuts for the wealthy and budget cuts for social and public service sectors. As 8,000 fires sweep across Texas destroying nearly 2 million acres of grassland and forest and 400 homes, the Texas Legislature is attempting to cut the state Wildfire and Emergency Program by more than 30 percent and take nearly $10 billion from schools.

The story goes that the cuts are needed to balance an out-of-whack budget. All the while, Texas continues to rank in the top ten of states with the most regressive tax policies. Taxes on the bottom 20% of wage earners rank fifth highest in the nation. Texans earning less than $8,000 annually pay 12.2% of their income in state and local taxes while those earning over $463,000 pay only 3.3% of their income in these taxes. Texas relies on highly regressive sales and property taxes while spending less than any other state on services. Texas ranks 49th in per capita spending on mental health programs and their proposed new budget would reduce that by 40%.

Of course, spending for wildfires is really unnecessary if you don’t believe in global warming along with Rick Perry. You don’t need to spend on social services or equalize the tax burden as long as the top 1% continue to chuck in most of the money to your campaign coffers and you can plead to the Federal Government and to God for more money when you need it.

In Montana we are not quite that bad. A recent study by the Institute on Taxation & Economic Policy found that those earning an average of $8,700 a year in Montana pay 6.1% of their income in state and local taxes while the top 1%, those earning an average of more than $1 million, pay 4.6%. Our tax system is based more on a graduated income tax, but also includes several perks for high earners like allowing a deduction based on capital gains earnings. Recent legislatures have been hard at work lowering the number of tax brackets and the tax rates on upper income folks as well as reducing the taxes on large corporations, but we have a way to go before we compare to Texas.

In 2007, Republicans cut firefighting funds from the Montana budget and they wound up in a Special Session to appropriate money for a worse than expected fire season. As we reduce the number of firefighters in Montana and make cuts to environmental services, we can at least be buoyed by keeping the Texas plan in mind and hope that when our next round of wildfires hits, God will still still be prepared to intervene where our lawmakers fear to tread.

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