Montana’s Tax System: How Do We Stack Up?

Apr 15, 2014

StateandlocaltaxesOn Tax Day, we all spend some extra time thinking about how much we pay in taxes. Even more so for low- and middle-income families, who contribute a larger share of their income than high income people do. The difference is significant – Montana low-income families pay 6.4% of their income in taxes, compared to 4.7% of the wealthiest Montanans. 

The Institute on Tax and Economic Policy released a new report that compares the tax structure of each state and examines this issue of who pays.  

How does Montana stack up? There’s good news and bad news.  

First, the good:

And now the bad:

All in all, Montana is in the middle of the pack when compared to other states.  But we could do more to help working low-income families. Twenty-four states have improved the disparity in the share of income going toward taxes by enacting state-based Earned Income Tax Credits, which lowers the taxes paid by working low-income families

As Montana families complete their taxes, policymakers should consider policies like the Earned Income Tax Credit to ensure a prosperous Montana. 

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.