Moving quickly on tax relief legislation, the Idaho House Wednesday approved cutting the state’s top two income tax rates and increasing the food tax credit for lower income Idahoans, sending the measure to the Senate on a vote of 53-16.
Three Republicans joined 13 House Democrats in opposition.
The state’s top tax rates would decline by a tenth of a percentage point, to 7.3 and 7 percent, and the corporate income tax would also decline by the same amount, to 7.3 percent. Those whose incomes are below the threshold for the top rates, currently $7,260, would be eligible for a $10 increase in the grocery tax credit, to $110 per person, or $130 for seniors. The overall impact to the state is $28 million loss in revenue.
“We’re talking about $28 million in tax relief back to those people in the state of Idaho that send us the $3.3 billion that we’re going to spend this year,” said House Majority Leader Mike Moyle, the prime sponsor. The Star Republican said the tax cut would benefit about 75 percent of all taxpayers. “We can give back just a little bit.”
With a long list of Republican co-sponsors, there was litte doubt that the measure would pass the House, and there was little actual debate on the house floor, with several Democrats rising to argue in opposition. Rep. Ilana Rubel, D-Boise, cited an analysis by the Idaho Center for Fiscal Policy that said the benefit to highest wage earners would be more than 100 times that of the lowest, $813 in lower taxes, compared to $7.
“Do we really think that the gap between rich and poor in this nation isn’t big enough, and that the Idaho Legisalture needs to step in to see if we can just drive that gap a little wider?” she said.
Rep. Ryan Kirby, R-New Plymouth, said the combination of top rate cuts and increased food tax credit was “about as fair as we can get it.” He said a person earning $100,000 would see about $100 in lower taxes, while a married couple with three children that received the higher food tax credit would see a $50 benefit.
“That seems to tip the scales over on the side of fairness quite a ways,” he said.
The bill is expected to see a harder time in the Senate, where concerns over long-term plans to increase education spending are likely to weigh in on the debate.