States are competing every day for people, jobs, investment and opportunity.

Tax policy is an important part of that competition.

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Across the country, states have been reducing income tax rates, flattening tax structures and looking for ways to make themselves more attractive to workers, entrepreneurs and employers. In our own region, the competition is especially clear.

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Wyoming and South Dakota impose no individual income tax. North Dakota's top rate is just 2.5 percent. Idaho has a flat income tax. Montana, meanwhile, continues to impose a graduated income tax with a top rate of 5.4 percent.

That puts Montana at a competitive disadvantage.

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MSPC believes Montana can do better.

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The state has already made progress in recent years by reducing rates and simplifying its income tax structure. Flat. Fair. Montana. is about taking the next logical step: moving to one rate for everyone — 4.7 percent.

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No multiple rates. No penalty for earning another dollar. Just one simple rate applied equally.

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Flat. Fair. Montana. isn't just a slogan. It is built on economic research and analysis.

 

THE ECONOMIC CASE

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Research commissioned for this effort examined what a 4.7 percent flat income tax could mean for Montana's economy and its residents.

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The analysis projects that the reform could increase Montana's Gross State Product by approximately $525 million, increase wages by $286 million, support approximately 2,445 additional jobs, and increase after-tax income by approximately $642 per resident compared with the 2026 baseline.

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Those numbers matter because tax reform isn't ultimately about tax tables or government spreadsheets.

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It's about people.

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It's about the small-business owner deciding whether to expand. It's about the family trying to keep more of what it earns. It's about the entrepreneur deciding where to launch a company. It's about the worker considering whether Montana is the right place to build a career and raise a family.

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A competitive tax code sends a message that Montana welcomes all of them.

 

WHY A FLAT TAX?

 

At its core, a flat tax is about fairness and simplicity.

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Under a flat tax, taxpayers face the same income tax rate regardless of how much they earn. Someone who earns more still pays more in taxes — often substantially more — but the government doesn't impose a higher tax rate simply because that person earned another dollar.

 

We believe that is a fairer way to structure Montana's income tax.

 

A flat tax also makes the system easier to understand. Families and businesses should not need an economics degree to understand the basic rate they pay to their state government.

 

One rate. Applied equally. Easy to understand.

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That's the idea behind Flat. Fair. Montana.

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MONTANA IS COMPETING

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Montana doesn't make tax policy in a vacuum.

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People have choices about where they live. Businesses have choices about where they invest. Entrepreneurs have choices about where they start their next venture.

 

And Montana is surrounded by states that take economic competitiveness seriously.

 

For decades, policymakers sometimes treated state tax policy as though people and businesses would simply accept whatever tax burden was imposed on them. Today's economy makes that assumption increasingly difficult to defend. Workers are more mobile, businesses can locate operations in multiple states, and entrepreneurs can often choose where they want to live and work.

 

Montana has enormous advantages: its people, communities, natural beauty, quality of life and entrepreneurial spirit.

 

Its tax code should be an advantage, too.

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We don't believe Montana should simply try to keep up with its neighbors. Montana should compete to win.

 

THIS IS ABOUT MONTANA'S FUTURE

 

Flat. Fair. Montana. is bigger than changing a number in the tax code.

It is about what kind of state Montana wants to be over the next decade and beyond.

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Will Montana remain a place where young people can afford to build their lives?

Will entrepreneurs see the state as a place to take risks and create jobs? Will existing businesses have reasons to expand here rather than somewhere else?

Will families be allowed to keep more of what they earn?

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Those are questions worth discussing across the state.

 

That's why this effort isn't confined to Helena.

 

Mountain States Policy Center is taking the conversation directly to Montanans through research, public education, community events, town halls and conversations with taxpayers, business owners, civic leaders and policymakers.

 

We want Montanans to understand what a flat tax would mean, ask tough questions, examine the research and participate in the debate over their state's economic future.

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OUR COMMITMENT 

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MSPC approaches this effort the same way we approach all of our work: with research, transparency and a commitment to solutions.

 

We will continue studying Montana's tax system, comparing the state's competitiveness with its neighbors, analyzing the economic effects of reform and providing Montanans with understandable information about the choices facing their state.

 

And we'll continue making the case for a tax system that rewards work, encourages investment and treats taxpayers fairly.

 

Montana has already taken important steps toward a more competitive tax code.

 

Now it's time to finish the job.

 

One state. One rate. Flat. Fair. Montana.