Latest news with #SenateBill323
Yahoo
04-04-2025
- Business
- Yahoo
Three income tax bills pass first hurdles— but none are what the governor ordered
Photo illustration by Getty Images. Montana Gov. Greg Gianforte has made it clear that he wants the Legislature to pass income tax cuts for the third time since his election in 2020. This session, he wants to lower the state's top tax rate — the rate most Montanans pay — by a full percentage point during the next two years. But the legislation he is backing — touted in his budget proposal last year, his State of the State address in January, and in multiple press conferences throughout the legislative session — has stalled in the Senate, while different proposals that take a narrower focus of lowering taxes for middle-income earners have received bipartisan support from lawmakers. The governor's preferred proposal, Senate Bill 323, carried by Sen. Josh Kassmier, R-Fort Benton, had a hearing before the Senate Taxation Committee earlier this week. The bill would lower the top tax bracket (Montana has two brackets) from 5.9% to 5.4% next year, and down to 4.9% the following year. It would also expand the earned income tax credit from 10% to 15%. The bill was tabled in committee. On Wednesday, Kassmier made a motion to blast the bill out of committee to the floor in order to let the entire Senate debate its merits, but the motion failed. 'While I join all Montanans in being disappointed with the Senate's vote yesterday, I am optimistic that by working together, we can get (income tax cuts) done for the Montanans who sent us here. And we must,' Gianforte said at a press conference on Thursday. Meanwhile, two competing proposals that were also tabled in committees, Senate Bill 203, brought by Sen. Mike Yakawich, R-Billings, and Senate Bill 546, brought by Sen. Dave Fern, D-Whitefish, were blasted to the floor on Wednesday. Yakawich's bill passed an initial Senate vote earlier this week 47-3 before the Senate Finance and Claims Committee tabled it. Sen. Greg Hertz, R-Polson, who leads the taxation committee, said he supported the 'good bipartisan bill' coming back to the floor for a final vote, drawing contrasts to Kassmier's bill. 'We know 323 was tabled. And the reason why? It started at the top,' Hertz said. 'We're starting at the bottom here. It's a middle class tax cut. If you don't want to bring this to the floor, you're voting against a middle-class tax cut.' Rather than cut the top tax bracket rate, SB 203 would expand the lower bracket — taxed at 4.7% — to include individuals making as much as $100,000. For married couples filing jointly the bracket delineation would be at $200,000, which Yakawich has said will cover up to the 90th percentile of earners. SB 203 passed the Senate in a final vote Thursday 31-19 and was sent to the House. In convincing the Senate to hear SB 546 on the floor, Fern called it the 'largest middle-class tax cut that's being presented.' 'I have one of the best kept secrets in this chamber. This is great competition for middle class tax cuts. And I would love the opportunity to present this innovative, interesting, out of the box bill to all of you.' The blast motion was successful, and the Senate debated the measure during Thursday's session. Rather than tinker with the income tax rates, Fern's proposal would create an income-based tax credit targeting exclusively the lower and middle income taxpayers. While he called the text a 'mouthful,' Fern said the Middle Income Tax Reduction, MITR, would subtract a percentage of a filer's tax liability, starting at 4.7% of taxable income and stepping down a percentage for additional income. Using a teacher filing jointly as an example, with a Montana taxable income of $70,000, Fern said those folks would receive about $930 as a tax credit. 'I suggest that MITR is the best bill that targets what I call a silent majority of our citizens and taxpayers. The MITR assures savings and spending so that dollars stay at home,' Fern said. 'We're not treating our middle class taxpayers, I think, with the respect they deserve.' Speaking in opposition to the bill, Hertz said that lawmakers faced a decision over two bills that both cost $200 million a year. '(We) can't have both of them. We're going to have to choose one or the other. Although we might be able to do a hybrid method.' He said Fern's bill was too complicated by essentially creating '50 new tax brackets' due to the percentage-graded credit. He also expressed concern that it would make it harder for tax software companies to tailor their products for Montana, which presents a small portion of their customer base. 'It doesn't meet my simplification test,' he said. In support, Minority Leader Pat Flowers, D-Belgrade, said he was happy to see Democrats bring forth an income tax bill — which the party traditionally has opposed — specifically one so focused on lower-income earners. 'For years, the income tax reduction proposals that have come here have done the same thing. They've primarily benefited taxpayers at the highest level,' Flowers said. 'And who needs an income tax reduction? Is it somebody making $500,000 a year? No.' Fern said that the bill could be amended to mesh with Yakawich's, if the Legislature found that to be the best compromise on policy. The chamber passed the bill 28-21. The other major income tax cut bill moving through the Legislature is House Bill 337, introduced by Speaker of the House Brandon Ler, R-Savage. Ler's bill falls in between the Yakawich proposal and the governor's plan, It contains both a slight reduction in the top tax rate from 5.9% to 5.4%, and an expansion of the lower, 4.7% bracket up to $70,000 for individual filers, and $100,000 for joint filers. Tax day is less than two weeks away, and on the House floor Monday, Ler said he'd heard from many folks who were getting hit on their taxes from last year. His bill, he said, would benefit everyone. 'This bill is aimed to lowering all income tax brackets. This will help all Montanans whether you're low income or high income,' Ler said. The measure passed along party lines. In his press conference Thursday, Gianforte said that proposals aimed at expanding the lower tax bracket 'only benefit a portion of Montanans.' 'Carving out special groups and giving special breaks to special interests or special groups of Montanans is just not fair,' the governor said. Pushed by reporters whether he was concerned that higher income Montanans wouldn't receive a tax cut, Gianforte reiterated that his ultimate goal was to create a single, flat-tax rate for everyone. 'It's just basically fair,' he said. 'You have a fairer system because everyone shares the burden based on their income level.' He said that while his goal was to get a full 1% decrease in the top tax rate, 'there can be honest debate about how much to reduce the top rate.' He added that no lawmakers had approached him to discuss alternate tax plans. 'If there's a concern in the Legislature, let's have a discussion,' he said. 'None of those legislators have come to me to talk to me about an alternative proposal, so I would welcome the discussion. Let's get around the table and figure this out for the people of Montana.'
Yahoo
31-03-2025
- Business
- Yahoo
Governor seeks historic cuts, while bill aimed at middle-class receives bipartisan support
Montana Gov. Greg Gianforte espouses his income tax cut plan on the steps of the Montana Capitol on March 28, 2025. Courtesy photo. Gov. Greg Gianforte made another public pronouncement last week that his administration would deliver the largest tax cut in Montana history — to the tune of $850 million, according to his office. But opponents to the governor's plans to cut income taxes say the the approach would disproportionately benefit the state's wealthiest earners, while low- and middle-income Montanans would see just double-digit cuts. 'We're here today because we believe in a simple truth– you know how to spend your money better than the government does,' Gianforte said during a rally on the steps of the Montana Capitol on March 28. 'Every day you wake up, you go to work. You provide for yourself and for your family. You budget carefully and you save where you can. But too often, when you get a paycheck, you look at it and you wonder, 'Where did it go?' We know the answer — taxes.' Earlier that day, the governor's preferred plan to cut taxes received its first hearing before the Legislature. Carried by Sen. Josh Kassmier, R-Fort Benton, Senate Bill 323 would lower the top income tax rate — paid by Montanans earning more than $21,000 as single filers — from 5.9% to 5.4% in 2026 and down to 4.9% in 2027. The bill also cuts the long-term capital gains tax from 4.1% to 3.9% and expands the Earned Income Tax Credit from 10% to 15%. Montana currently has two income tax brackets — one at 4.7% and one at 5.9% — which split at roughly $21,000 for an individual filer or $41,000 for married filers. The state used to have a six-bracket marginal tax system until 2021. Calling it the 'third installment' of the governor's long-term plan to get to a single, flat tax rate for the state, Mark Blasdel, director of the Governor's Office of Economic Development and former Senate President, pointed out Montana has the highest tax rate of mountain region states. However, many of the states surrounding Montana also have a statewide sales tax. 'Montana is also currently the 17th highest tax rate in the nation. So we believe this is an incredible opportunity to bring this down another 1%,' Blasdel told the Senate Taxation Committee. 'We think this is a great way to continue that downward trend of the collection of taxes. It makes it so that we continue to be able to put pressure so that the budget does not continue to grow at a higher grade than inflation, and it continues to keep more money in the pockets of hard working Montanans.' But opponents decried the across-the-board cutting of the top tax bracket, saying it doesn't offer meaningful relief to middle-income earners. An analysis by the Montana Budget and Policy Center indicates that the wealthiest 1% of Montanans would see roughly $10,000 in tax breaks under the policy, while individuals making $50,000 or less would receive less than $100. 'The problem with structuring an income tax reform in this way … is that for every dollar you have, you get that cut. So if you have a lot of dollars, a huge bucket of dollars, you get that cut on every single dollar in that bucket,' Rose Bender, Director of Research for the Budget and Policy Center, told the committee. 'And if you just have a couple dollars you get that cut on just those couple dollars. So it's really impossible to reform income tax in this way while not disproportionately benefiting the wealthy.' But Kassmier pushed back and said that giving Montanans their money back, no matter how much, was a goal that everyone should want to get behind. 'These income tax dollars are the people's dollars. We have an opportunity here in the session to give our the people's money back, and if it's only going to give somebody $50 back or $100 back, I'm telling you that that means a lot to the people that are out there working,' Kassmier said. At previous press conferences, Gianforte has said his plan is the only comprehensive plan that addresses all income levels, with the expansion of the earned income tax credit helping out the lowest earners. In addition, the reduction in capital gains tax rate was lauded by supporters of the bill as helping farmers and ranchers. 'A lot of people think of (capital gains) as just stocks and bonds and those types of things that would come into play here, but for farmers and ranchers, capital gains comes into play on sale of property and also on certain livestock and equipment sales,' said Nicole Rolf, with the Montana Farm Bureau Federation. SB 323 was also supported by Montana Taxpayers Association, the Montana Stockgrowers Association, and the Montana Chamber of Commerce. The Montana Federation of Public Employees, Montana Nonprofit Association and a former Democratic legislator, Margie McDonald, spoke against the bill. The governor on Friday said that while there are several proposals aimed at reforming incomes taxes, his plan is the 'only fool-proof conservative plan.' 'Cut. The. Rate,' Gianforte said. [subhead]Majority support for middle class cuts [/subhead] A competing proposal, sold as a 'middle-class millenium' bill, passed the Senate with support from all but three Senators on Monday. Sen. Mike Yakawich, R-Billings, carried Senate Bill 203 with support from both majority and minority leadership as cosponsors. Rather than cut the top tax bracket rate, SB 203 would expand the lower bracket to comprise individuals making up to $100,000 — covering up to the 90th percentile of earners, according to Yakawich. For married couples filing jointly the bracket delineation would be at $200,000. The bill 'provides income tax relief for thousands of middle-class Montanans by expanding the number of people eligible for the state's lower (4.7%) tax rate,' Yakawich said. 'This bill is tailored to the middle-class Montana taxpayers.' Yakawich used his five millennial-aged children as examples — they have good jobs and families, but still struggle to make ends meet with rising costs of living in Montana. 'It's that middle 60 to 90 percentile. We really want to love them up. We want to thank them,' he said. 'That money that they save … might help them come back into the community, come back into our state.' SB 203 also changes the long-term capital gains tax, against expanding the eligibility for the lowest tax rate to an individual's first $100,000, from the current $20,500. The measure passed the Senate 47-3 and will next be heard by the Senate Finance and Claims Committee. 'Residents across the state repeatedly told us that tax relief is a top priority for them,' Senate President Matt Regier said in a statement following the vote. 'SB 203 is a historic step to limit government and help all Montana income tax payers prosper.'
Yahoo
31-03-2025
- Business
- Yahoo
GOP governor rallies around historic proposal to slash state's income tax: 'I am optimistic'
Montana is considering making cuts to its individual income tax rate as a growing number of states have completely transitioned to eliminating the tax altogether. Republican Gov. Greg Gianforte came out in support of Senate Bill 323 last week, which would cut the state income tax from 5.9% to 4.9%, at a news conference with Americans for Prosperity. The cut is what the governor suggested in his November budget proposal. "So I came into office back four years ago after 16 years of Democrats in the governor's office in Montana, and we had the highest income tax rate in the Rocky Mountain West," Gianforte told Fox News Digital in an interview. "I firmly believe that the citizens of Montana know how to spend their money better than the government does. And so we've made it a priority to bring the tax rate down and to simplify our tax code. We've gone from seven tax brackets to two. With this change that we're proposing, we knock another full percentage point off the income tax rate, and we'd be very close to a flat tax," he added. Montana Ag Asks Supreme Court To Uphold Law Requiring Parental Consent For A Minor's Abortion If passed into law, it would lower the Treasure State's comparatively high tax rate compared to others in the region even further, after the bracket impacting most people went from 6.9% to 6.75%, down to 5.9% in recent years. The state previously had seven brackets, and now it has two as of 2021. Read On The Fox News App "It's the most conservative tax-cut bill in front of our legislature right now, and we are a conservative legislature. I am optimistic," the Republican said. The current version of the bill, which is still early in the process, would cut the tax rate to 5.4% in 2026 and the 4.9% rate would start in 2027, according to the legislation's fiscal note. "As a fellow Montanan feeling the economic strain from the current rising cost of living in our gorgeous state, the bill would provide some relief," Bianca Lester of Butte said, according to a news release. "I'm a single mom of four, which is no easy feat, and I need every penny that I make to help house and clothe and feed my kids. This bill would allow for so many other families like mine to keep all of our hard-earned income," Lester added. Donald Trump Jr. also came out in support of the proposed cuts. "[Gianforte] pushing for the largest income tax cut in Montana history, just like my father's historic tax cuts! Montana leading the way with conservative, Trump-style tax policies! Get it done! #MAGA," he posted last week. Morning Glory: Trump, Tariffs, The Cr And The Tax Cuts The development comes as Mississippi Gov. Tate Reeves just signed legislation that will phase out the state's income tax entirely in the coming years with the hope of boosting economic development in the southern state. In Montana, there are also bills moving through the process to tackle the state's property taxes. Deep Red State Makes Major Announcement About Income Tax: 'We Plant Our Flag' Nationwide, President Donald Trump and Republicans in Congress are also pushing for major tax reforms, including no taxes on tips and overtime pay, and there have also been other income tax cuts floated by the Trump administration. "I'm excited to get this across the finish line, because I think Montanans know how to spend their money better than the government does," Gianforte article source: GOP governor rallies around historic proposal to slash state's income tax: 'I am optimistic'
Fox News
31-03-2025
- Business
- Fox News
GOP governor rallies around historic proposal to slash state's income tax: 'I am optimistic'
Montana is considering making cuts to its individual income tax rate as a growing number of states have completely transitioned to eliminating the tax altogether. Republican Gov. Greg Gianforte came out in support of Senate Bill 323 last week, which would cut the state income tax from 5.9% to 4.9%, at a news conference with Americans for Prosperity. "So I came into office back four years ago after 16 years of Democrats in the governor's office in Montana, and we had the highest income tax rate in the Rocky Mountain West," Gianforte told Fox News Digital in an interview. "I firmly believe that the citizens of Montana know how to spend their money better than the government does. And so we've made it a priority to bring the tax rate down and to simplify our tax code. We've gone from seven tax brackets to two. With this change that we're proposing, we knock another full percentage point off the income tax rate, and we'd be very close to a flat tax," he added. If passed into law, it would lower the Treasure State's comparatively high tax rate compared to others in the region even further, after the bracket impacting most people went from 6.9% to 6.75%, down to 5.9% in recent years. The state previously had seven brackets, and now it has two as of 2021. "It's the most conservative tax-cut bill in front of our legislature right now, and we are a conservative legislature. I am optimistic," the Republican said. The current version of the bill, which is still early in the process, would cut the tax rate to 5.4% in 2026 and the 4.9% rate would start in 2027, according to the legislation's fiscal note. "As a fellow Montanan feeling the economic strain from the current rising cost of living in our gorgeous state, the bill would provide some relief," Bianca Lester of Butte said, according to a news release. "I'm a single mom of four, which is no easy feat, and I need every penny that I make to help house and clothe and feed my kids. This bill would allow for so many other families like mine to keep all of our hard-earned income," Lester added. Donald Trump Jr. also came out in support of the proposed cuts. "[Gianforte] pushing for the largest income tax cut in Montana history, just like my father's historic tax cuts! Montana leading the way with conservative, Trump-style tax policies! Get it done! #MAGA," he posted last week. The development comes as Mississippi Gov. Tate Reeves just signed legislation that will phase out the state's income tax entirely in the coming years with the hope of boosting economic development in the southern state. In Montana, there are also bills moving through the process to tackle the state's property taxes. Nationwide, President Donald Trump and Republicans in Congress are also pushing for major tax reforms, including no taxes on tips and overtime pay, and there have also been other income tax cuts floated by the Trump administration. "I'm excited to get this across the finish line, because I think Montanans know how to spend their money better than the government does," Gianforte said.
