BOISE – The Idaho House voted along party lines in favor of a $51 million income tax cut on Thursday, sending the measure to an uncertain fate in the Senate.
House Majority Leader Mike Moyle, R-Star, the bill’s sponsor, said, “When businesses come here, they look at that top income tax rate.” His bill would lower the top personal and corporate income tax rates in Idaho from 7.4 percent to 7.2 percent, plus exempt the first $750 in taxable income. Its fiscal impact is estimated at $51.2 million less for the state’s general fund every year going forward.
Opponents said a permanent tax cut would cut into funds Idaho needs for education, transportation and other needs. “Idaho’s rural school districts are in dire condition,” said Rep. Paulette Jordan, D-Plummer. “I do not feel this bill solves that problem.”
Moyle said, “This doesn’t harm education. There’s a way to do both. … You’ve gotta help the guy back who’s paying the bill. We should’ve been doing this all along. This is not a bad bill, this is good tax policy.”
Moyle said Idaho has the third-highest top income tax rate west of the Mississippi. “If you want the businesses to come here to bring the jobs that grow the economy, you’ve got to be competitive,” he said. “This isn’t a big step. I wish it was bigger, but it’s a step in the right direction.”
Washington has no state income tax; neither does Nevada or Wyoming. But Moyle said Idaho’s top tax rate of 7.4 percent is higher than Montana’s 6.9 percent and Utah’s 5 percent. Oregon’s top rate is 9.9 percent.
The House has repeatedly passed such tax-cut bills in recent years, only to see them die in the Senate. New Senate Tax Chairman Dan Johnson, R-Lewiston, hasn’t committed to give the House-passed bill a hearing in his committee.