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House approves extension of tax credit legislation, 62-7

House approves extension of tax credit legislation, 62-7

Idaho Freedom Foundation staff
February 14, 2013
[post_thumbnail] Rep. Lynn Luker speaks on the House floor in opposition of House Bill 88.

“Here we are on Valentine’s Day, but this bill is no valentine for the taxpayer,” said Rep. Lynn Luker, R-Boise. Speaking to his fellow House members, Luker was arguing against House Bill 88, known as the Hire One More Employee Act. The proposal passed in the House overwhelmingly, 62-7, and now goes to the Senate.

“A couple of years ago we passed the Hire One Act,” noted Rep. Mike Moyle, R-Star. “This new bill” is “an effort to clarify and simplify that law from two years ago.”

HB 88 would provide a four-year extension to the tax credit found in the Hire One Act, a tax credit available to employers in Idaho who hire workers at above minimum wage. It is slated to end Dec. 31, 2013. The bill also provides a $1,000 tax credit for companies that hire a veteran. “How many jobs will be created by this? I don’t know,” Moyle noted. “But it will create jobs, and it is a good bill.”

“I’m curious about the accountability in this bill,” wondered Rep. Shirley Ringo, D-Moscow. Ringo asked if the bill purported to create long-lasting jobs, to which Moyle responded “to take advantage of the tax credit, a company must hire a person for a minimum of nine months.”

One of the seven voting against the bill said she thinks a tax credit is not in keeping with a true free enterprise system. “We used to have a free enterprise system in this country,” said Lenore Hardy Barrett, R-Challis. “If we had low and reasonable taxes in Idaho, we wouldn’t have to play these tax credit games. We thought we had started something wonderful a couple of years ago, and it wasn’t wonderful. We need to stop picking winners and losers in the economy. If we’re going to do tax breaks, let’s do tax breaks for everyone.”

But another representative sees the bill as a potential revenue producer for the state. “We should look at this from a business standpoint,” Rep. Dell Raybould, R-Rexburg, argued. “We need to be willing to spend a little money, to make a little money, and this bill will bring revenues to Idaho.”

Luker was unswayed by any argument favoring the tax credit. “We could call this the ‘third time’s the charm bill,’” Luker countered. “We heard the promises about job creation two years ago, but nobody used it. Why do businesses hire an employee? Because a business needs an employee, not because a business gets a tax credit. This will be paid for with money out of our general fund, and we’ll be handing out tax money to businesses that are going to hire anyway.”

It is all about job creation believes an east Idaho lawmaker. “The governor has led us in job creation,” Rep. Jeff Thompson, R-Idaho Falls, stated. “I believe we are constantly competing with other states for jobs, and we need to have these tools to create jobs.”

“Again, with this bill we will be giving taxpayer money to businesses that are going to hire anyway,” Luker reiterated. “We’ve already determined that we will attempt to repeal the personal business property tax this year, and that will be difficult. Yet with this bill we will spend about $10 million a year on companies that have already determined that they need new workers.”

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