The House Revenue & Taxation Committee has approved HB 548, Majority Leader Mike Moyle’s $126 million tax cut bill, after voting down motions both to hold the bill and to amend it. Rep. Grant Burgoyne, D-Boise, proposed amendments, saying if the goal is really to get Idaho’s corporate income tax rate down to Montana’s level of 6.9 percent, that could be done in a single year for less than $10 million – without changing individual income tax rates. The bill would lower both corporate and individual rates a tenth of a percentage point a year for the next six years, to get both down from the current 7.4 percent to 6.8 percent by 2020.
Rep. Neil Anderson, R-Blackfoot, noted that income tax rates are just a piece of the total tax burden, and the state Tax Commission published a study in the fall comparing Idaho’s total tax burden. He asked how Idaho compares to other states on that, but Michael Chakarun, tax policy manager for the state Tax Commission, said the author of that report wasn’t present so he couldn’t address it. That prompted Rep. Mat Erpelding, D-Boise, to move to table the bill because the Tax Commission couldn’t answer the question, but he got only four votes for that motion.
That Tax Burden Study, posted on the commission’s website in October, is based on 2011 tax rates and shows that Idaho’s overall per-person tax burden ranks 49th nationally out of 51, and 11th regionally among 11 western states, both rankings that were unchanged from the previous year.
Matt Hunter, president and CEO of the Pocatello-Chubbuck Chamber of Commerce, urged passage of the bill, saying, “I think it will help us to recruit companies to the state and bring more revenue to the state.” He said the tax cuts would “help us bring companies out of places like California and Oregon and places where we’re working to bring ‘em from.”
Donna Yule, executive director of the Idaho Public Employees Association, said, “For the last few decades, Idaho legislators have operated under the philosophy that cutting taxes will cause great prosperity and businesses will flock to Idaho, and the facts tell a very different story.” Instead, she noted, Idaho now has the highest percentage of minimum-wage earners in the country. “At the beginning of the recession, Idaho ranked 43rd for median income. We now rank dead last,” she said. “Tax cuts do not benefit the economy, and they only further devastate the public services that we all depend on.”
Christine Tiddens of Catholic Charities of Idaho spoke against the bill, saying a family of four earning $30,000 a year would get just a tiny tax break, while a family earning $300,000 a year would get more than $1,600 in benefits. Moyle acknowledged that low-income earners would get far less under the bill than higher-income earners, but said, “Remember, they don’t pay very much either. … They pay less of the burden.”
The bill now moves to the full House – but Senate Local Government & Taxation Chairman Jeff Siddoway, R-Terreton, has already said he won’t give it a hearing if it arrives at his panel. Siddoway told the AP the only tax-cut bill he favors this year is one to fully remove the property tax on business equipment, which lawmakers eliminated last year for most Idaho businesses.