If members of Congress actually heed President Donald Trump’s call for tax reform—and Idaho lawmakers follow suit with their own tax cuts—imagine how that could supercharge the economy in our state.
Trump’s tax reform call-to-action came days ago, in which he urged Congress to reduce “the crushing tax burden on our companies and our workers.” In some respects, tax reform is an even more difficult task than the repeal of Obamacare, which the Republican-led Congress failed to do and has virtually given up trying. Yet the effort is on par in terms of national economic importance.
“If we want to renew our prosperity, and to restore opportunity, then we must reduce the tax burden on our companies and our workers,” Trump said.
Similarly burdened, Idaho is plagued by the highest income taxes in the intermountain region, with its top marginal rate of 7.4 percent. Further, that top rate is not reserved for the wealthy: it kicks in at just about $11,000, meaning a youngster earning minimum wage at a burger shop, such as my 17-year-old son, is in the state’s top tax bracket. It’s the punchline of a not-so-funny joke I often tell in describing Idaho’s wayward tax policies.
High tax burdens are, unquestionably, holding our state back. On the American Conservative Union’s Family Prosperity Index, which measures the well-being of families in individual states, Idaho performs fairly well, coming at a No. 3 in the latest survey. Idaho should hold that top spot, but the state’s confiscatory taxes continue to hurt our ranking.
Starting in 2000, Idaho policymakers began working to reduce income taxes, an effort that stalled about five years ago. Since then, the governor and Legislature have flirted with meager proposals to slice one-tenth of one percent from the state’s top rate, to no avail. The latest iteration of income tax relief, in the 2017 legislative session, was sidelined for the elimination of the grocery tax, which the governor vetoed.
The dynamic duo of both state and federal tax relief has the promise to bolster the state’s economy. It would allow workers and businesses to keep more of their own money, freeing them to spend more, invest more or save more.
Congress must act on the president’s tax reform effort, which is expected to be the most comprehensive overhaul in decades. Similarly, the Idaho Legislature must also prepare its own tax proposals, and it should begin doing so right away. The state and federal efforts should be viewed collaboratively. If Washington, D.C. does manage to cut taxes, the need for Idaho to follow suit to be competitive with other states will not diminish. Furthermore, if Congress fails to act, and there is a high probability of that occurring, there’s even more need for Idaho lawmakers to do their part to relieve the ever-increasing economic burden on taxpayers who are struggling to make ends meet.
Americans are counting on politicians—state and federal—to put aside the overheated political rhetoric and do something that’s simply the right thing to do for the people: Let them keep more of what they’ve worked hard to earn.