Idaho House Republicans advanced a plan to cut incomes taxes by $51 million for individuals and businesses despite Democrats’ lengthy objections to the proposal.
The bill, sponsored by House Majority Leader Mike Moyle, R-Star, passed on a 58 to 11 party-line vote. Only Rep. Luke Malek, R-Coeur d’Alene, missed Thursday’s vote.
Moyle’s bill would cut Idaho’s top tax bracket from 7.4 percent to 7.2 percent. The reduced rate would apply to corporations as well as individual filers.
The legislation would also exempt the first $750 of a worker’s taxable income from state taxes.
Moyle touted his bill as a spark to ignite job growth in the state. He told colleagues a lower corporate income tax rate would draw more businesses to Idaho, which would create more jobs and bring more capital investment to the state.
To allay concerns of lawmakers who believe the tax cut could interfere with plans to spend more on education, Moyle assured colleagues they could add to the public schools budget and still provide tax relief for businesses and families.
“You can do both,” Moyle asserted.
Democratic Assistant Minority Leader Ilana Rubel of Boise assailed the tax cut from every angle, calling it not wanted by the Idahoans, based on recent survey data. She also told colleagues the state should invest more in education.
“We have to fix education,” Rubel said during floor debate.
Rubel also characterized the plan as an aid to Idaho’s rich families.
“It would be one thing if this were doing wonders for our working families, but it’s not,” she criticized.
A family of four would need to earn just more than $39,000 a year to be nicked by Idaho’s top tax bracket. A single worker who earns more than $10,905 would also fall into the top tax bracket.
Boise Rep. John Gannon, a Democrat, similarly criticized the tax cut. He told colleagues the state needs to continue to invest in education, and do more to address funding shortfalls for road and bridge repair.
Rep. Kelley Packer, R-McCammon, said she supports lowering income taxes, but also wants to see comprehensive tax reform in the next few years, rather than a “piecemeal” approach. Such reform, she said, would potentially include closing tax exemptions, which would allow legislators to bring down the overall rate.
Rep. Jeff Thompson, R-Idaho Falls, told colleagues that though he favors the the income tax reduction, he’d also like to see the state end its tax on groceries.
The bill now heads to the Idaho Senate for further deliberations. Last year, the Senate declined to hear a House-passed proposal to cut taxes, but this year Senate leaders have signaled a move favorable approach.
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