Bill description: HB 649 increases the homeowners exemption (up to the increase in the home's value) for residential property owners 65 or older.
Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth?
HB 649 will reduce the annual property tax owed by residential property owners 65 or older if the property in question was attained before the owner turned 65. The reduction will be equal to the property tax increase since 2019 or since the owner turned 65, whichever happens later.
According to the bill's fiscal note, this targeted tax break could save Idaho seniors up to $43 million in property taxes.
The underlying problem with this proposal (and other similar targeted tax breaks) is that it pays for the reductions not by requiring the government to reduce its spending accordingly, but by requiring other property tax payers to make up the difference. In other words, it's not a net tax reduction; it's a tax shift. The property taxes of younger homeowners will increase to make up at least some of what is lost to local taxing districts under this proposal.
An equitable tax cut paid for with corresponding spending reductions is laudable policy, but a tax shift that benefits some taxpayers at the expense of others is an unacceptable form of wealth redistribution.