HELENA - Montana's low- and middle-income families pay a larger share of their income in state and local taxes, on average, than do the state's richest households, a new national study concludes.

The Institute on Taxation and Economic Policy, a Washington, D.C., research group, analyzed tax structures of the 50 states in a study released this week.

"No one would ever design an income tax with lower tax rates for the best-off taxpayers," said Matthew Gardner, the institute's executive director. "But that is exactly what Montana's tax system overall does. ... In other words, Montana has an unfair, regressive tax system."

The study divided nonelderly Montana family taxpayers into categories, by income, using 2007 data.

It found the lowest fifth of Montanans by income - those making less than $16,000 annually - paid on average 6.1 percent of their income in income, property and sales and excise taxes. Their average income was $8,700 a year.

It rose to 6.2 percent for middle-class families with annual incomes between $31,000 and $47,000 a year and average annual incomes of $37,500.

Yet the highest 1 percent of families, with at least $434,000 in annual incomes, paid 5.5 percent. This group's income averaged nearly $1.1 million annually.

Montana slipped from the institute's 2002 study in part because of a major tax overhaul proposed by Republican Gov. Judy Martz and approved by the 2003 Legislature to lower state income tax rates and offer tax credits on capital gains.

A 2006 Revenue Department analysis, done by the administration of Democratic Gov. Brian Schweitzer, said these 2003 changes cost the state treasury $100 million in lost income during their first full year, with taxpayers whose incomes topped $500,000 receiving 47 percent of the benefit.

State Revenue Director Dan Bucks said the new study fails to examine the overall level of state taxes.

"Montana always comes out well in those rankings," he said. "Governor Schweitzer has opposed and prevented any state increases in his tenure."

Reporter Charles S. Johnson can be reached at (406) 447-4066 or at chuck.johnson@lee.net.