David Hill

Leading up to the Revolutionary War, American colonists had a broad ability to levy taxes within their communities. For example, the Old North Bridge, where the Concord Militia turned back the Redcoats, was constructed with locally raised taxes. It was not until the mid-1760s when the Crown enacted the Sugar, Stamp and Townshend Acts that England’s complete control of taxes became too much to bear. 

At first, the people were not particularly bothered when they were taxed for local needs like roads and bridges, but they were mad when they were being taxed to support a runaway monarch without any representation. As England continued taxing the colonies, the people’s frustration boiled over. This continued abuse developed into the mantra popularized by Massachusetts attorney, James Otis, who declared that there should be “no taxation without representation.”

Because of the dangers posed by a distant government making decisions on what to tax and how much, many of us now believe that the most effective, responsible, and responsive government is the government that is closest to the people, and that the government that governs least governs best.

Today, we have more direct tax representation, but it is still frustrating to see our tax dollars spent in ways that we deem irresponsible or unnecessary. It is particularly frustrating to see an unbalanced federal budget with a deficit growing by trillions of dollars. Unfortunately, once we notice that there is such large-scale federal waste, it is hard to not believe that the same level of waste occurs at all levels of government. 

Because many are concerned about an out-of-control government, we tend to withdraw from the idea that the government at any level can do anything correctly. However, before condemning our state or local governments for operating in an irresponsible way, we have to first understand our state and local taxes.

When I looked into our state’s tax structure, it appeared clear that there were two main groups of taxes. The first type is those that get collected by the state (such as sales and minerals taxes), the second type is the taxes that are collected locally (such as property taxes and sales taxes that are returned from the state).

Of the state’s total revenue, roughly one-third comes from sales and use taxes, one-fourth comes from severance (minerals) taxes, and the remaining balance largely comes from federal dollars and investment earnings. This money is pooled and used to run the state. These funds are also paid to counties and towns in the form of sales tax distributions, which are primarily made up of the state returning about one-third of the sales taxes to the communities that they come from.

For counties, the main source of revenue is property taxes. These taxes are collected locally and stay local. For example, last year, my property taxes were spent as follows: Local Schools — 57%; Park County General — 15.9%; City of Cody — 6.6%; Northwest College — 6.6%; County Fire — 4%; County Hospitals — 4%; Cody Cemetery — 3.3%; Cody Recreation —1.3%; County Weed & Pest — 1.3%. Our counties and towns are only able to operate because of the property taxes they collect, and to a lesser extent, the distributions they receive back from the state.

Recently, I’ve heard a proposal that the Legislature should eliminate property taxes for all and instead raise sales taxes. At first this idea seems attractive — after all, I support low taxes and a limited government that is able to operate within its means, and I oppose government budgets that are unnecessarily large.

However, after considering the effects of eliminating property taxes and raising sales taxes, I cannot help but think about the effects this will have throughout our state. Because sales taxes are collected by the state and distributed back to the counties, this proposed tax structure would result in counties and towns having no ability to control their own taxes and would instead require them to receive practically all of their revenue from the state. This process would necessarily result in a greater centralization of money and power in the state and a decrease in local control. 

In addition to the increased size of state government and decrease in local control, eliminating property taxes and increasing sales taxes is necessarily regressive — that is to say, the individuals with the least money, who do not own property, and who cannot afford to travel to Montana to do their shopping, will be affected the most. It is further estimated that the sales tax rate would have to go up to between 15%-20% if property tax is eliminated.

In Wyoming, all county and state budgets are available to the public. I encourage all those who are interested to learn about Wyoming’s tax structure and what their taxes are used for.

Because I support small, local governments, and I oppose the centralization of power and money by the state or federal governments, I oppose any tax scheme that would merely shuffle money away from our counties and towns and towards the state. Let us honor our country’s founders by supporting and protecting the governments that are closest to the people. 

I believe we should reduce and eliminate taxes whenever possible, but if we are going to be taxed, we should keep taxes as close to the people as possible and not allow our leaders to continually change our tax structure to consolidate power.