The middle class often feels overlooked, says Sen. Mike Yakawich, a Billings Republican. Policy discussions typically focus on either the very wealthy or the less fortunate. “But that middle class, we have to let them know we love them, we care about them, we want to help them,” Yakawich said during a talk with Senate President Matt Regier on the Montana Majority Report podcast.
Regier, a Kalispell Republican, introduced Senate Bill 203, which Yakawich is presenting in the Senate, to adjust income tax brackets favoring middle-class Montanans. This bill is among several income tax revisions under discussion in the Legislature. Some measures, led by GOP leaders, aim to cut taxes for middle-class workers, although Montana’s Republican governor supports a broader tax overhaul.
Yakawich described his proposal to the Senate Taxation Committee as the “millennial bill,” targeting young professionals. He mentioned his own children, whose six-figure household incomes are now insufficient for raising families or buying homes. Montana’s current income tax system has two brackets at 4.7% and 5.9%, splitting at about $21,000 for individuals. SB 203 would extend the lower bracket to include those earning up to $100,000, covering up to the 90th percentile. For joint filers, the threshold would be $200,000.
This tax cut could save individuals in the 60th to 90th percentiles between $56 and $616, according to the Legislative Fiscal Division. “That can cover a lot of diapers, it can cover a lot of costs for families who are growing and struggling and trying to make it,” Yakawich said. The bill’s fiscal note predicts a $250 million annual reduction in state revenue by 2029. “The intent is to have the best bill for the state of Montana, for our citizens,” Yakawich stated.
Gianforte’s approach
Republican Gov. Greg Gianforte advocates for fewer taxes, proposing the largest income tax cut in Montana history. He aims to reduce the top tax rate by half a percentage point in the next two years, eventually achieving a flat tax rate. “We must continue reducing the tax that most Montanans pay,” Gianforte said at a recent press conference.
Gianforte compares Montana to neighboring states with no income tax or a flat rate, highlighting that Montana lacks a sales tax. “Montanans are losing out,” he said, noting potential gains in earnings and business opportunities. The governor’s plan offers $850 million in permanent tax relief but favors the highest earners, according to a Montana Budget and Policy Center analysis.
Despite this, Gianforte claims his plan would reduce taxes across all income levels. “Ultimately, there are different routes to get to a flat tax at a lower rate,” he said, expressing openness to other legislative proposals.
One other GOP proposal
House Bill 337, proposed by Speaker of the House Brandon Ler, R-Savage, suggests raising the lower tax bracket to $70,000 and reducing the top rate to 5.65%. However, the House Taxation Committee tabled Ler’s bill with a 20-1 vote.
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