Montana Budget & Policy Center: The Montana We Could Be
ITEP Work in ActionIn Montana, the higher a household’s income, the lower share of that income it tends to pay in state and local taxes [see Chart 1]. One reason for this is that people who make less money end up paying a larger share of their income in local sales taxes and property taxes. An income tax with a graduated rate structure helps offset this to an extent — as income goes up, the rate someone pays goes up too. Reducing the top income tax rate and reducing the number of rates not only reduces the revenue coming into the state, but also makes the overall tax system less equitable.