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LETTER: Gianforte's tax math is taxing

Daily Inter-Lake | UPDATED 8 years, 7 months AGO
| May 29, 2016 9:45 AM

I am responding to Mr. Greg Gianforte’s op-ed letter of May 15. Greg, you only use two values in your stance on the current state income tax structure: $17,100 TAXABLE income and 6.9 percent top tax rate. I think it is important to get all the numbers out there to show how that $17,100 value is arrived at.

Use a single filer with no adjustments to keep numbers simple. Earning $11.68/hour for 2,080 hours per year equals $24,288 adjusted gross income. If you did not have the deductions coming and just this value multiplied by the 6.9 percent tax, your bill would be $1,676. The state allows a 20 percent standard deduction of your adjusted gross income (within limits), equaling $4,858. Everyone gets a personal exemption of $2,330. Now you have $7,188 less taxable income. This lowers the tax by $496 that the state has foregone collecting.

Subtracting $7,188 from the $24,288 adjusted gross income equals the magic value of $17,100 TAXABLE income you refer to. Multiply this by your 6.9 percent top tax rate and you get a tax of $1,180 ($1,676-$496).

That’s all fine and well, but where is the static $544 tax reduction amount for the top tax rate bracket? When subtracted from the $1,180 the final tax bill is $636! Divide $636 by the adjusted gross income and the effective tax rate is 2.62 percent. That’s $1,040 potential taxes not collected. When these values use your 6.9 percent tax rate we get $482 final tax ($154 less) and 1.98 percent. My take, Greg Gianforte, is you are a businessman, not a politician. Why did the businessman omit the details from a politically standard practice. I expect bones with meat, not table scraps!

As far as “zero” government growth — you can only cut so much. I sense you infer the current budget was/is not balanced? Is the state not running a surplus? Infrastructure is exempt? Does that mean the gasoline excise tax will be increased, indexed to inflation, both or neither?

The Fed is starting to raise interest rates. Do you still favor waiting until it costs more to borrow? Coal will stay in the ground in a free marketplace. Doesn’t the spoon counter pay federal tax on inventory; would he still have to count it for the IRS? Your letter makes it sound like he only counts and pays it to the state. Clue us in, Greg! The devil is in the details — or lack thereof. —Dale Liston, Kalispell

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