Governor’s Tax Plan Helps the Wealthiest

Dec 05, 2022

Montana has the opportunity to invest in Montana communities with a record surplus of $1.9 billion. Governor Gianforte plans to use much of the state budget surplus in tax cuts that benefit the wealthiest Montanans more than the rest. 

While we have yet to see the full details of the governor’s plan, he has publicly stated that it includes permanent income tax changes coupled with temporary property tax relief. Those income tax changes include dropping Montana’s top income tax rate from 6.5 percent to 5.9 percent, giving the wealthiest 1 percent of Montanans an average tax cut of nearly $6,000 annually. Those with incomes near the median income, between $43,000 and $67,000, would receive an average tax cut of $70.

What’s more, this tax cut will further steep our tax code in racial inequity, as over 96 percent of this tax cut will go to white Montanans who have disproportionately higher incomes. Indigenous Montanans, who make up 7 percent of the state population, will receive less than 1 percent of the tax cut. 

The governor is supplementing this big income tax cut with a child tax credit, details of which have yet to be released. Even if this child tax credit is structured in the best possible way to reach families with low wages to help with child care and housing costs, the wealthiest Montanans will still be getting over $5,000 more each year in income tax cuts, on average, than those with low and moderate incomes. 

The governor’s tax plan also appears to include temporary assistance related to property taxes, but we wait for further details. As property taxes are an increasing concern for Montanans trying to house their families, a temporary plan is inadequate. We hope the governor and legislature will look to the bipartisan effort in the Revenue Interim Committee to establish a property tax credit for those at low and moderate incomes (including renters) who are facing high property taxes.

If the wealthiest Montanans and corporations are required to pay their fair share in taxes, Montana can invest in our communities and address longstanding racial and social inequality. Unfortunately, the Governor’s tax plan moves Montana in the opposite direction, with tax cuts that primarily benefit the wealthy and big businesses. This plan falls short of directing relief to workers earning low wages who are struggling to afford food, child care, and housing. 

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.