President Obama’s proposal to raise taxes on the richest Americans and cut them on the middle class will help Idaho more than most states, an economist who worked for the last five governors said.
Idaho’s top one percent have a smaller share of the state’s total income and its overall income is among the lowest in the nation, said economist Mike Ferguson. This means the state has less income inequality than many.
So imposing a higher rate of tax on capital gains and closing what Obama calls the “trust fund loophole,” which allows the most wealthy Americans to avoid some taxes when passing on money to heirs, would have a positive effect on Idahoans, he said.
President Obama will speak at Boise State University Wednesday on his first stop after delivering the State of the Union Tuesday night. from there he goes to Lawrence, Kansas.
Raising taxes on anyone will be unpopular with Idaho's Republican leaders and their base, many who would actually be better off under Obama's plan, Ferguson said.
“I think it’s very clever and creative (for Obama) to come into the lion’s den,” Ferguson said. “His program will probably benefit Idaho to a greater extent than other states.”
Ferguson developed economic projections for the last five Idaho governors until he retired. Then he formed the Idaho Center for Fiscal Responsibility and retired in 2014. He pointed to a 2014 study funded by the Albertson’s Foundation that projected Idaho would see only a 4 percent increase in households, but households with income from $50,000 to $75,000 are projected to decline by 1 percent. Households with income above $75,000 are projected to decline by 2 percent.
Households with income from $25,000 to $35,000 are projected to increase by 7 percent; households with income from $15,000 to $25,000 are projected to increase by 10 percent; and households with income below $15,000 are projected to increase by 14 percent, Ferguson said.