News Release
Strong Support Shown for Governor's Tax Reform Plan
2/18/2003
Chuck Butler
406-444-5523
cbutler@state.mt.us
Senate Bill 407, sponsored by Tax Committee Chair Senator Bob DePratu, provides for an income and capital gains tax rate reduction for Montana families, backfilling the revenue lost from that reduction with a limited sales tax on certain items that will be paid, in part by Montanans, but to a large degree by nonresidents, according to Revenue Director Kurt Alme.
"Economic development is the cornerstone of our administration. Business climate, including our tax structure, must be competitive," said Governor Martz. "This tax reform legislation will help create the competitive business climate we need for the creation of higher-paying jobs."
The Governor, Senator DePratu, Revenue Director Alme and others in attendance all noted that, in Montana, it is the individual income tax that is out of line, with the highest stated tax rates in the nation and the highest marginal capital gains rates in the region.
Senator DePratu chaired the Governor's tax council that developed a specific proposal for the income and capital gains reductions.
"In our tax council, we took testimony from many, including successful CEO's, who stated that they cannot recruit people to come here because of our tax structure," said Senator DePratu in his testimony. "Some even had to set up offices in other states in order to get the qualified help they need."
Testimony from citizens across the state included numerous examples of how Montana's tax rates deprive Montana of jobs, investment and tax revenue.
"This tax reform proposal is a long-term solution, intended to improve our economy," said Governor Martz. "It is aimed squarely at economic development. With a ranking of 46th in the nation in per capita income, we simply must focus on long-term job and business growth. This, in turn, will produce more revenue for the state over the long term."
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(full text of Governor Martz's Testimony)
