October 8, 2010 in Idaho

Allred calls GOP attack ad a ‘distortion’

By The Spokesman-Review
 

BOISE - The Idaho Republican Party has launched an attack ad against Democratic candidate for governor Keith Allred, charging that he’d tax everything from child care to church bake sales, a claim Allred dubs a “wild distortion.”

Norm Semanko, Idaho Republican Party chairman, said the new TV commercial, which is running statewide including in the Spokane TV market, is based on Allred’s statement at a debate in Twin Falls that everything is on the table when it comes to reviewing existing tax exemptions.

“That means school lunches,” Semanko said. “That means sales of meals by churches to their members - all of these things are in Idaho Code as tax breaks. That seems to be a very dangerous road to head down during tough economic times.”

Allred, however, says his proposal is not to raise taxes, but to broaden the tax base by removing exemptions to allow overall tax rates to be lowered. “I have been absolutely consistent for the entire 10 months of this campaign that every dollar raised by closing tax exemptions goes to cutting tax rates on Idaho families,” Allred said Friday. “That is my iron-clad commitment. I have never talked about anything else.”

Still, Semanko contended that Allred wants to spend more, not less, so his idea of re-examining tax breaks must be a tax-raiser.

Allred called that “absolutely false,” and said, “I have said that we need to invest more in education, and do so in cost-effective ways. But the ways of raising money for education are not by closing tax exemptions.”

Instead, he said he favors other moves, like more funding for tax collectors to collect already-due taxes and shifting priorities for prisons and health and welfare programs to allow more spending on education.

“I’m not talking about growing government. I’m talking about making government smarter and using our resources in a more cost-effective way to allocate more to our priorities as everyday citizens,” Allred said.

Allred also has proposed a three-cent cut in Idaho’s 25-cent per gallon gas tax, and called for lowering Idaho’s personal income tax rates. The gas tax cut would be offset by raising fees for heavy trucks, which state studies show now underpay for their wear and tear on roads, and the income tax rate cuts would be covered by closing tax exemptions.

Semanko said even if overall tax rates are lowered, eliminating exemptions would force certain sectors to pay more in taxes. “That’s a good recipe for eliminating jobs and stifling job growth,” he said, dubbing it “the dangerous liberal policy of tax and spend.”

Allred hasn’t identified which exemptions he’d close; instead, he’s called for a process similar to what he’s done at his citizen activist group, The Common Interest, where a wide swath of members reviewed an issue and then took a position, and where there was broad support, the group lobbied for changes.

As governor, Allred said, he’d ask 1,000 people from each of Idaho’s 35 legislative districts to review detailed information for and against keeping current tax breaks.

“My proposal is to eliminate those for which there is a 60 percent majority among everyday citizens that (the exemptions) don’t make sense, and then use every dollar of that to cut overall tax rates,” Allred said. “Here’s why that’s economically powerful and a job creator: Because think about who it is that gets the tax breaks. It’s not everyday citizens and it’s not small businesses. It’s the politically powerful.”

Allred, a professional mediator and former Harvard professor who’s running as a Democrat but has long said he’s nonpartisan, said his concept is a free-market idea that he’s surprised the Republican Party would oppose. “Tax exemptions are government subsidies,” he said. “It’s the old story of a majority that’s been in power too long and they’ve gotten too cozy with special interests.”

Allred said tax exemptions granted by state lawmakers typically are for those who had political power in the past, because “political power tends to lag and is looking backward. But the market is always looking to the future.” By tying the economy to past political power, Allred said, tax breaks “put a brake on where the market wants to go” and “warp the free market.”

Allred said he considers all tax breaks to be fair game for review, including those from sales tax as well as income and property tax. Citizens who do the review will use common sense, he said, and won’t favor taxing church bake sales.

“I trust the people of Idaho to make that judgment better than I trust conversations between lobbyists and the Legislature to make that judgment,” Allred said.

The ad, which Semanko said is a “substantial buy,” says, “With Keith Allred’s plan, we could see new taxes on hundreds of products and services, but Allred’s new taxes can only mean fewer jobs. Keith Allred, too liberal for Idaho, higher taxes and fewer jobs.”


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