Income Tax Cuts More Than Doubled Tax Revenue in Montana, New Mountain States Policy Analysis Reveals

A new analysis from Mountain States Policy Center President Chris Cargill challenges the claim that lowering income tax rates inevitably reduces government revenue. Looking at Montana’s tax collections over the past decade, the analysis finds that both individual and corporate income tax revenues more than doubled while Governor Greg Gianforte and Republican lawmakers repeatedly reduced income tax rates.

The full analysis can be found here.

For years, opponents of income tax relief have argued that tax cuts would reduce government revenue and threaten public services. Montana’s experience tells a different story.

According to the analysis, 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 also grew substantially, 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 revenue sources more than doubled over the last decade.

Those figures come as Governor Greg Gianforte and Republican lawmakers enacted a series of reforms designed to simplify the tax code and reduce income tax rates. In 2021, the state reduced seven income tax brackets to just two. In 2023, lawmakers lowered the top rate to 5.9 percent, and in 2025 they reduced it again to 5.4 percent.

Critics often argue that lower tax rates automatically result in lower government revenue. Montana’s experience demonstrates that tax rates are only one part of the equation.

Government revenue also depends on economic growth. When individuals and businesses keep more of what they earn, they have greater incentives to work, invest, expand businesses, and create jobs. As economic activity increases, the tax base grows and generates additional revenue.

The result is a larger economy producing more taxable income.

Montana’s tax collection data reflects that reality. Despite repeated reductions in income tax rates, both individual and corporate income tax collections reached record levels. Revenue growth also significantly outpaced the state’s population growth during the same period.

The results in Montana provide another real-world example showing that tax relief and revenue growth are not mutually exclusive. The frequently repeated claim that tax cuts inevitably “starve government” is not supported by Montana’s recent experience.

As lawmakers across the country debate tax policy, Montana offers an important lesson. States do not have to choose between tax relief and strong revenues. Policies that encourage investment, entrepreneurship, and economic growth can benefit taxpayers while also strengthening state finances.

For years, critics warned that lower tax rates would reduce revenue.

Governor Greg Gianforte and Republican lawmakers cut income tax rates.

Individual income tax collections increased 111 percent.

Corporate income tax collections increased nearly 112 percent.

The numbers speak for themselves.