Gianforte's Proposed Tax Cuts Advance; Democratic Tax Proposal Rejected
Montana lawmakers advanced three bills Tuesday requested by Gov. Greg Gianforte to reduce taxes for residents and business owners. They tabled another bill that would have broadened the state’s Earned Income Tax Credit.
Gianforte and his Republican colleagues in the statehouse say the proposed tax cuts are key to carrying out the governor’s so-called Montana Comeback Plan.
Sen. Greg Hertz of Polson is carrying two of the bills.
"The objective there is to attract more businesses into Montana with higher wage jobs," Hertz says.
Senate Bill 159 would cut the state’s top marginal income tax rate from 6.9% to 6.75%. It would impact more than half of taxpayers in Montana and would reduce state revenue by an estimated $30 million.
Senate Bill 182 would create a new fund, like Montana’s current rainy day and fire funds, the state could fill and use to pay for tax cuts in the future. It would require the state budget to meet a series of thresholds before excess revenue could be added to the so-called Tax Reduction Fund.
Senate Bill 184 would exempt some from the corporate capital gains tax if they bring new business to Montana and employ local residents.
Democrats largely opposed all three bills, saying they disproportionately benefit the wealthy.
Sen. Edie McClafferty of Butte spoke against Senate Bill 159 on the floor.
"At a time when Montana families desperately need help, this bill does nothing for them."
On Tuesday morning, Republican lawmakers voted to table a proposal from Democratic Rep. Emma Kerr-Carpenter of Billings. House Bill 424 would have broadened the state’s Earned Income Tax Credit that benefits low-income residents and created two new tax brackets on people who make $500,000 a year or more.
"Adding this bracket ensures that those who are doing well, especially during these unprecedented economic upheavals, contribute their fair share to the well-being of their fellow Montanans," Kerr-Carpenter says.
The Montana Chamber of Commerce and the Montana Taxpayers Association opposed the bill saying that higher taxes on the wealthy could send the wrong message to job creators.
Democratic Minority Leader Kim Abbott said during a press conference Tuesday she expects her caucus to revisit this policy later in the session.