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Senate panel says yes to tax cut; hurdle cleared for adjournment

Senate panel says yes to tax cut; hurdle cleared for adjournment

Idaho Freedom Foundation staff
March 29, 2012

A hurdle has been cleared to provide Idahoans with tax relief and get the Legislature out of town. The Senate’s tax committee voted 6-3 Thursday in lukewarm support of a bill to cut taxes by $35 million.

The measure would lower corporate and individual income tax rates by two-tenths of a percent and four-tenths of a percent. The committee forwarded the bill to the full Senate without recommendation on a motion by Caldwell Republican Sen. Jim Rice.

“Government is not the source of wealth,” Rice said. “Citizens are the source of wealth.”

But opponents, such as Boise Democrat Sen. Elliot Werk decried the bill as a form of “wealth redistribution” because it targets the top individual income tax bracket and the corporate tax rate. “I haven’t seen anything in here that indicates that a single job will be created,” Werk said.

Dan Johnson, a Republican senator from Lewiston said, “If I had it my way, I would have put some money into early childhood education. When we invest in early childhood education, it prepares them for a lifetime of success, a lifetime of learning.” But Johnson said he was willing to have the bill move ahead.

Senate Pro Tem Brent Hill of Rexburg said the bill will have a positive impact on Idahoans.

The decision came after about 45 minutes of testimony for and against the bill. Business and limited government organizations spoke in favor. Public employee, labor unions and some Boise residents spoke in opposition.

Erik Makrush of the Idaho Freedom Foundation told the committee that Idaho ranks poorly compared to other states when it comes to confiscatory tax policies. Lowering the tax rates would help the state compete. “We believe strong that this is good legislation,” Makrush said. “Every dollar you give back leads to the restoration of freedom.”

Bruce Perry, a Boise attorney and a candidate for lieutenant governor 10 years ago, called the proposal “a marginal amount of money to the wealthiest among us.” Perry said the Legislature should instead restore cuts to Medicaid.

Shawn Barigar, the president of the Twin Falls Chamber of Commerce, said the bill’s tax cuts are important to Idaho’s businesses. He noted that the bill would level the playing field for Idaho businesses that pay two different tax rates—one for businesses that pay under the personal income tax rate and others that pay under the corporate tax rate. “Passing this bill will allow you to leave $35.7 million in the economy,” Barigar added.

Idaho Public Employees Association Executive Director Donna Yule called the bill “the height of irresponsibility,” adding, “We do not have enough money to run Idaho’s government now,” Yule.

Note: IdahoReporter.com is published by the Idaho Freedom Foundation.

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