One way to say “freedom” is to cut taxes. And there they were — Speaker Moyle, Representative Monks, and Senator Anthon — all grouped around Governor Little as he signed (use a loudspeaker voice here) “the biggest tax cut in Idaho history!”
The tax cut, House Bill 40, lowers Idaho’s income tax rate from 5.695% to 5.300%, for a 0.395% rate cut. It also extends a tax exemption for certain U.S. military veterans and removes capital gains taxes on precious metals holdings. All in all, the bill promises $253 million in tax cuts for Idahoans. Combined with other proposals (grocery tax credit, and property tax cuts), total tax cuts could be as much as $403 million overall.
Not a bad day, huh? Well, sorry to throw any cold water on this one, but the “biggest tax cut in Idaho history” could and should have been a lot bigger with other tax cuts, too.
For perspective on what this year’s tax cuts mean, look at the graph above. With the governor’s proposed state budget at nearly $14.4 billion (see the tall column), the “biggest tax cut in history” looks anemic at best — it’s that little column in the middle. The other tax cuts are even smaller — see the tiny dash of a column on the right of the graph. While government grows in chunks (55% in the last five years alone), the taxes are cut in nibbles (merely 2.8% of the budget).
Even more stark is the difference in what most legislators accepted as a pay increase for themselves compared to the tax cuts they approved and are considering for the Idaho taxpayers. The Legislature already approved big pay jumps for state employees and is looking at more significant increases for judges. Look at the graph below. Note that with these tax cuts, the average Idaho family will keep an additional $576 of their money each year, and that’s good. But earlier this session, each legislator’s pay increased by a whopping $5,087 per legislator!
We have three takeaways from this. First, big tax cuts are always welcome, and huge tax cuts are even more appreciated. Second, the Idaho Legislature appears to take care of government agencies more than it takes care of Idaho taxpayers. While government grows by leaps and bounds each year, the tax cuts are microscopic by comparison. Third, the Legislature takes care of its own more than it takes care of Idaho taxpayers. Families get hundreds in relief, while legislators and some public employees get unprecedented pay raises.
We call on the Legislature to double, even triple down on this great start to tax cuts. Reduce government more. Cut taxes more. Families are hurting and it’s time for the Legislature to be less focused on bureaucracies and their own paychecks, and more focused on allowing Idaho families to thrive. Do even better!
