Montana Gov. Greg Gianforte speaks during a Mountain States Policy Center event. CEO and President of the organization, Chris Cargill, stands to the side on Tuesday, Sept. 8, 2026 in the Montana Capitol in Helena, MT. (Jordan Hansen / Daily Montanan)
Montana Gov. Greg Gianforte has introduced a proposal for a 4.7% flat income tax rate, sparking immediate backlash from Democrats. This proposal aims to simplify the current two-tiered system, which peaks at 5.4%. Currently, many Montanans pay the 4.7% rate, especially those filing jointly with incomes up to $95,000. Gianforte’s administration reduced the tax brackets from seven to two since 2021.
A Montana Legislative Fiscal Division report earlier this year predicted the new tax plan would reduce tax collections by up to $130 million annually by 2029. Gianforte unveiled this at a Mountain States Policy Center event, part of the conservative State Policy Network. Gianforte argues the flat tax would bolster Montana’s economy and attract more businesses, competing with neighboring states like South Dakota and Wyoming, which have no income taxes.
Proponents like Americans for Prosperity, backed by the Koch brothers, support the move to a flat tax. Gianforte emphasized disciplined budgeting would offset budget impacts. He cited Montana’s improved fiscal health, rising from No. 22 to No. 8 nationally according to Truth in Accounting, linked to the Searle Freedom Trust.
State Democrats, however, oppose the plan, arguing it favors the wealthy. Rep. Mark Thane criticized the $120 million tax break for high earners, warning it would jeopardize healthcare funding. The Montana Budget and Policy Center agrees, noting 95% of the tax cuts benefit the top 20% wealthiest households.
Gianforte and Chris Cargill, CEO of the Mountain States Policy Center, promised more jobs, citing Janicki Industries’ move to Montana as proof. Cargill emphasized Montana’s appeal with low electricity costs and business-friendly policies.
Real estate, Montana’s largest industry, contributed $12.2 billion to the GDP in 2025. Rose Bender from the Montana Budget and Policy Center questioned the long-term implications of tax cuts on housing affordability and overall economic competitiveness.
