Who'd have thunk?
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Montana cut income tax rates, and revenues more than doubled.
For years, opponents of income tax relief have warned that lowering tax rates would reduce state revenues and threaten government services.
Montana’s own tax collection data tells a very different story.
Over the past decade, individual income tax collections increased from $1.06 billion in Fiscal Year 2014 to $2.24 billion in Fiscal Year 2024. That’s an increase of more than 111 percent.
Corporate income tax collections grew even faster, rising from $147.6 million to $312.3 million over the same period—an increase of nearly 112 percent.
In other words, Montana’s two major income tax sources didn’t stagnate after lawmakers began reducing individual income tax rates. They more than doubled.
Those numbers should force policymakers to reconsider one of the most common arguments in tax policy debates. The claim that lower tax rates automatically lead to lower tax revenues simply isn’t supported by Montana’s experience.
Green makes a great point:
The problem is that too many policymakers don’t see taxes as a way to raise revenue, but as a means for punishing their enemies.
