HELENA — Advocates for a flat income tax in Montana launched an educational campaign Tuesday at the State Capitol, with Gov. Greg Gianforte calling on the upcoming Legislature to make the proposal a reality. Not everyone is on board.
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Gianforte joined the Mountain States Policy Center and Americans for Tax Reform to announce the Flat Fair Montana Initiative, which promotes a 4.7% flat income tax rate for all Montanans.
"We're here today because we believe a simple truth. Montanans know how to spend their money better than the government does," Gianforte said.
The governor framed the proposal as a straightforward policy move, pointing to other states that have already adopted similar structures.
"It's a simple idea. Fifteen other states have already done it. One income tax rate. If you make more, you pay more. If you make less, you pay less. We want to get it done in this next legislative session," Gianforte said.
Idaho recently adopted a 5.3% flat tax rate. Wyoming and South Dakota have no income tax. Flat tax advocates say that even though Montana has consistently lowered taxes, not making this move could leave the state economically behind.
Chris Cargill, president of the Mountain States Policy Center, pointed to competition from other states as a reason for urgency.
"Georgia. Arizona. Colorado, Utah, Iowa. They're all lowering their rates. And by not moving and basically just standing still, we're falling behind some of those other states," Cargill said.
Cargill also cited an independent analysis suggesting broader economic benefits from the proposal.
"Not only would it increase the average yearly income of every Montanan by about $642, but it would also result in about 2,400 new jobs in our state. It would increase the state's domestic products, the amount of money that's in the state's economy, by hundreds of millions of dollars," Cargill said.
Not everyone supports the initiative. Rose Bender, research director for the Montana Budget and Policy Center — a nonprofit, nonpartisan organization — said an analysis her group conducted on the impact of a 4.7% flat income tax rate raises concerns about who benefits most.
"Really, this is a tax cut for the wealthiest Montanans. Ninety-five percent of the benefit from this tax cut will go to the wealthiest 20% of Montanans," Bender said.
Bender said the analysis shows a further cut to the top rate would cost the state roughly $120 million each year in lost revenue.
"Lawmakers have a choice. Are we going to address rising costs for Montana working families, or are we going to double down on more tax cuts for the wealthiest?" Bender said.
Cargill said a recent survey showed 60% of Montanans were concerned about the state's income tax rate. A website outlining the initiative is now live, and the next steps include a series of town hall meetings beginning in Helena on Sept. 22.
