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Idaho's new flat tax came at great cost to freedom

Idaho's new flat tax came at great cost to freedom

Wayne Hoffman
September 6, 2022
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September 6, 2022

The maximum marginal tax rate was 4% when Idaho’s Democrat-controlled government first implemented the income tax in 1931. So forgive me if I don’t jump for joy as the Republican-controlled government hails the passage of a reduced income tax from 6% to 5.8%, which is still 45% higher than when the state only had the property tax. 

Yes, it is delightful that lawmakers and Gov. Brad Little used a special legislative session last week to finally rid the state of its progressive income tax in favor of a flat tax. It’s something the Idaho Freedom Foundation has advocated for years. People shouldn’t pay more because they make more.

But Little and lawmakers should go a step further. They should take bold action and work toward full elimination of the state’s income tax. In eliminating this problematic tax, Idaho would join the likes of Wyoming, Florida, Tennessee, and New Hampshire. Such a move would give Idaho families more of their own money to deal with record-high food and gas prices. 

But Little and his legislative pals couldn’t muster the courage for bold action to help families. 

Little’s bill is made worse by its inclusion of a minimum distribution, allowing money some people earned to go to people who didn't earn it, the very definition of wealth redistrIbution.

Equally wrong is massive overtaxation on the fruits of people’s labors, which should have made returning every penny of the state’s $2 billion surplus an absolute moral imperative. And getting the income tax as close to zero (or at least lower or as low as what it was when it was first initiated nearly a century ago) was a possibility that should have been considered. 

In fact, no other options were considered. Rep. Judy Boyle drafted a bill for a one-time property tax holiday. Other legislators wrote legislation to reduce the income tax rate to 5%. Other proposals called for a sales tax reduction or full elimination of the sales tax on groceries. None of those ideas saw the light of day because the governor had written the one and only proposal that could be considered. House Speaker Scott Bedke and Senate Pro Tem Chuck Winder went along with the scheme and denied legislators the opportunity to consider the merits of competing ideas. 

Presented with this obvious diminution of our republican form of government, a majority of legislators simply went along. They did so not because they were presented with the best idea, but because they didn't want to be accused of voting against a tax cut or against additional funding for schools (even though that measure was unconstitutionally added to the legislation). 

I guess they never considered James Madison’s warning in Federalist No. 47, which drew from  the wisdom of the French philosopher Montesquieu to state that the concentration of power in one person “justly be pronounced the very definition of tyranny.” 

So the special legislative session gave us a flat income tax that we wanted, but at the expense of undermining our republican form of government and continuing to be taxed at a high rate on the money we earn. It's hardly a moment worth celebrating.

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