State Politics

Tax cut proposal moved forward for hearings

A House panel will hold hearings on a proposal to pare Idaho’s two top personal income tax rates and corporate tax rate by a tenth of a point, balancing those top-end cuts with a $10 increase in the grocery tax credit for lower income households.

“We’ve grown government by a lot of money the last few years. It’s time we gave back a little bit,” House Majority Leader Mike Moyle told the Revenue and Taxation committee in presenting his draft bill. The committee voted to move it on for a full hearing,

Idaho’s top income tax rates of 7.4 percent and 7.1 percent would drop to 7.3 percent and 7 percent, and the corporate rate would drop to 7.3 percent under Moyle’s proposal. The next lowest tax rate of 6.1 percent applies to those whose annual income is below $7,260. Any wage earner whose annual income falls below that amount would be eligible for the higher grocery tax credit, which would rise to $110 per person, or $130 for qualifying seniors.

Moyle said Idaho needed to compete with surrounding states with lower income taxes and “show the country and the state itself that we’re willing to do the things necesarry to make us more competitive.”

Democrats on the committee challenged the real benefit to lower-income households, but ultimately only one lawmaker voted to hold the measure back.

Lauren Necochea, director for the Idaho Center for Fiscal Policy, noted after the vote that Idaho’s tax rates “are lower per capita than other states, and they’re lower than most states even when you control for us being a low income state.”

“There’s the other side of the question,” she added, “of what do we want to be able to pay for that this then jeopardizes.”

Bill Dentzer: 208-377-6438, @IDSbilld