Idaho House Majority Leader Mike Moyle, R-Eagle the prime sponsor of HB67, says he hopes his bill will bring business to Idaho and ease the tax burden on wage earners. But wait…the devil is in the details.
Bringing in jobs and tax relief for hardworking Idahoans sounds like a reasonable goal, right? Well, this bill may be good news to the very wealthy and corporations, but will do almost nothing for individuals and families with modest incomes. The only sure result is the toll it will take on the state budget.
The bill will eliminate tax on the first $750 of individual income, reduce the rate on the highest individual bracket to 7.2% and reduce the corporate income tax rate from 7.4% to 7.2%.
The Idaho Falls Post Register crunched some numbers. They figure someone with $30,000 in taxable income would take home a WHOPPING additional $4 per month, whereas Idahoans with taxable income of $100,000 would take home an impressive extra $15 per month. The bottom line? The benefits are significant only for corporations and individuals with taxable incomes in the quadruple digits or higher.
Moyle says that the goal is to bring Idaho’s income tax rates in better alignment with other states. However, Idaho’s total tax collections per person are already among the lowest in the nation, and we rank high as a state with an economic climate that favors business.
While the bill would have a negligible effect on the tax bills of the majority of Idahoans and provide a minimal business incentive, it would have a significant impact on the state budget. According to the Idaho Center for Fiscal Policy, the proposal would reduce Idaho’s general fund revenue by $51 million to $56 million. Notably, well over half of general fund spending supports public education.
Year after year, Idaho schools rank at the very bottom of the barrel in per-capita spending on students—which translates into low teacher salaries, high student/teacher ratios and other related problems. And ultimately, inevitably, the number Idaho students proceeding to college is well below the national average. Our kids and teachers literally can’t afford this tax cut.
It’s abundantly clear that one of the biggest disincentives for corporations in Idaho is difficulty recruiting educated, skilled workers. So while a tax incentive might provide a minor perk for corporations, cutting any corners on school funding will ultimately end up costing the state more in the long run.
If we are going to help attract and keep businesses in Idaho, and get more money in the pockets of working Idahoans, let’s focus education and forgo tax cuts for the wealthy.
Passing this cut would mean the Legislature might walk away with nothing as a cushion in the state coffers, a dangerous proposition given the major changes on the horizon of the federal budget landscape. And of course, it would mean $27.9 million less in revenue every year going forward; money that could be used for education, roads, and public safety programs.
Here is what we want you to do:
Call key members of the Senate (phone numbers listed below) and tell them NOT to cut revenue. We need to address the needs of education and roads in Idaho before we have more tax cuts that will benefit corporations and the wealthiest people in our state.
Here are the key Senators you should contact with phone calls:
Is your Senator on this list?
Call these key Senators and tell them to vote NO on Moyle’s tax bill.
If your Senator is on the list be sure to call them.