Us and them

It's election time, and once again I find myself interviewing one candidate after another. One thing that stands out, after dredging through my notes for past and present candidates, is how issues can be portrayed in terms of "us versus them" — and I don't mean Republicans versus the Democrats.

One division is between government and the private sector. This split rose to prominence recently after pension funds for state employees and teachers ran into problems.

Both funds could be made solvent by an infusion of state tax money — not a problem this year, considering a budget surplus that may hit an astounding $900 million for the next biennium, according to most recent estimates.

But with more and more corporate pension programs either shutting down or going into bankruptcy, and with most workers in the private sector looking at IRAs or 401Ks for future retirement, many voters want to know why government workers and teachers get bailed out but nothing is provided for the rest of the population.

One candidate told me we have a constitutional obligation to keep the two Montana funds solvent, but the question is really about fairness, not legal obligations.

This same candidate then told me it's a matter of choice. The implication was that people who chose to become carpenters, cooks, janitors, store clerks, loggers, insurance salesmen, mechanics, nannies, lifties, waitresses, cement finishers or truck drivers had made a bad personal choice.

That's a harsh division to make in our society. Another is the split between residents and nonresidents, particularly when it comes to talk about a tourist-related sales tax.

The idea is to capture some of the money from our out-of-state visitors by tacking on a percentage or two on certain goods and services. To ensure Montanans don't suffer from this tax, one proposal has been to reimburse residents through their income taxes or property taxes.

Which leads to another big division — property owners versus renters. Renters typically don't itemize deductions on their tax returns, so they wouldn't benefit from a sales tax rebate, and they don't pay property taxes — at least, they don't personally write the check.

That's one of the big arguments made in the homeowner-versus-renter debate — that renters don't pay property taxes. With 45 percent of the occupied units in Whitefish going to renters, according to the 2000 census, that would mean nobody's paying taxes on nearly half the residential units in the city.

Of course that's not true. Renters do pay property taxes. Homeowners, however, are favored. They can deduct interest payments on their mortgage from their federal income tax, and they might get a rebate on their property taxes from the state if Gov. Brian Schweitzer's Square Deal proposal is passed by the legislature next year.

When I asked Schweitzer how his Square Deal would help renters, he said they would benefit from other parts of the Square Deal package, especially holding down the cost of higher education. I didn't ask him how many renters have already completed their higher education and are out in the working world. Too many people assume renters are kids.

Here's a whacky proposal — allow renters the opportunity to deduct from their income tax the difference between their rental payments and the amount the landlord actually pays for mortgage, taxes and upkeep on their unit. That would be comparing the profit made by the landlord with the profit a bank makes by charging interest on a homeowner's mortgage. If one is deductible, why not the other?

Offering property tax rebates is a classic example of an easy campaign pledge bound to get voters excited. Everyone likes to see their taxes reduced — including renters.