Montana Could Be Moving Toward One Income Tax Rate. Here’s Who Would Actually Save Money.

Could Montana Move to a 4.7% Flat Income Tax?

Even if you agree with where the money goes, I doubt many people actually enjoy paying taxes every year.

With that in mind, Montana could be moving toward one flat income tax rate, but whether you actually save money would depend pretty heavily on how much you make.

Here's What Montana's Proposed 4.7% Flat Tax Would Actually Change

Yesterday, Gov. Greg Gianforte put forth his "Flat. Fair. Montana." plan for a 4.7% flat income tax ahead of the 2027 legislative session.

Currently, Montana has a two-tiered income tax system, with the top rate scheduled to drop to 5.4% in 2027.

Under Gianforte's proposal, everyone would eventually pay the same 4.7% rate.

So who wins?

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Montana's Flat Tax Would Mean Bigger Savings For Higher Earners

According to the Montana Free Press, lower-income Montanans generally wouldn't see much change because the current system already has a lower rate for those taxpayers. The biggest tax savings would go to people in the higher income brackets.

That doesn't automatically mean it's a bad idea. Gianforte argues that lowering the top rate could encourage people to invest, work, and do business in Montana, ultimately helping the state's economy.

But there's a cost to cutting taxes, too, and that could have some long-lasting effects on the state.

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Montana Could Lose Millions in State Revenue Under Flat Tax Plan

The Legislative Fiscal Division estimates that enacting a 4.7% flat tax starting in 2028 could reduce state revenue by about $140 million over the 2029 biennium.

Critics argue that means the people getting the biggest tax breaks would be Montana's highest earners, while the state would have less money coming in for government services.

And that's where the debate over the proposed change really starts.