Republicans in the state Senate have advanced a bill to simplify the state's income tax code from seven tax brackets to two.
The proposal would tax the first $20,500 Montanans make at 4.7% and income above that at 6.5%. That would compare to Montana’s current system in which the top marginal income bracket taxes people making over around $19,000 a year at 6.9%
Republican Sen. Greg Hertz of Polson is carrying the bill.
"It’s a onetime overhaul of our system to get rid of the credits and deductions that are going to special interest groups. It makes things much easier."
The bill would also eliminate 23 tax credits and deductions residents can claim.
This is Hertz’s second proposal this session to cut income taxes in the state. An earlier attempt stalled out. He said this plan will cost the state significantly less revenue, roughly $30 million annually, as compared to the original income tax cut proposal, which was predicted to cost $80 million annually.
Democrats voted against the bill, saying it'll cost the state too much in revenue that's used to pay for state services, and that it cuts too many credits.
The bill advanced on a party-line vote and faces a final vote in the Senate later this week.
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