Montana collected more than double the income tax revenue in 2024 compared to a decade earlier, even as state lawmakers repeatedly slashed tax rates under Governor Greg Gianforte's administration. A new analysis from Mountain States Policy Center, released June 25, 2026, challenges the widely held claim that cutting income tax rates automatically reduces government revenue. The report's author, Mountain States Policy Center President Chris Cargill, examined Montana's tax collections over the past decade and found that both individual and corporate income tax revenues soared while Republicans in the state capital pushed through a series of rate reductions.
According to the analysis, individual income tax collections jumped from $1.06 billion in Fiscal Year 2014 to $2.24 billion in Fiscal Year 2024, an increase of more than 111 percent. Corporate income tax collections grew at nearly the same pace, rising from $147.6 million to $312.3 million over the same ten-year period, an increase of nearly 112 percent. These revenue gains came as Montana simplified its tax structure dramatically. In 2021, the state reduced seven income tax brackets to just two. Two years later, lawmakers lowered the top rate to 5.9 percent, and in 2025 they cut it again to 5.4 percent.
The report finds that Montana's experience "demonstrates that tax rates are only one part of the equation" when it comes to government revenue. The analysis states that when individuals and businesses keep more of what they earn, "they have greater incentives to work, invest, expand businesses, and create jobs." According to Cargill's analysis, the result is a larger economy producing more taxable income, and Montana's tax collection data "reflects that reality." The report concludes that "the frequently repeated claim that tax cuts inevitably 'starve government' is not supported by Montana's recent experience."
The analysis explains the revenue growth through economic expansion driven by the tax cuts themselves. As the tax base grows from increased economic activity, the report argues, the government collects more total revenue even at lower rates. The mechanism is straightforward: lower taxes leave more money in private hands, spurring investment and job creation, which generates new taxable income that didn't exist before. The report also notes that revenue growth "significantly outpaced" Montana's population growth during the same period, suggesting the gains came from genuine economic expansion rather than simply more people paying taxes. Montana's revenue reached record levels despite the rate cuts, providing what the analysis calls "another real-world example showing that tax relief and revenue growth are not mutually exclusive."
The report offers Montana's experience as a lesson for lawmakers across the country now debating tax policy. States don't have to choose between tax relief and strong revenues, the analysis concludes. Policies that encourage investment, entrepreneurship, and economic growth can benefit taxpayers while also strengthening state finances. For years, critics warned that Governor Gianforte's rate cuts would shrink revenue. The numbers tell a different story: individual income tax collections up 111 percent, corporate collections up nearly 112 percent. The report's bottom line is simple: the numbers speak for themselves.