Just today, the Idaho House of Representatives voted in favor of HB 463, a proposal from Governor Otter to cut Idaho’s state income tax rate from 7.4% to 6.925%. It cuts the top marginal rate that much and also trims each lower bracket by the same amount. It also implements a $130 child tax credit for Idaho families.
This is a significant cut in rates and would give a big boost to Idaho’s economy. One would wonder why any Legislator who calls themselves a “conservative” or “Republican” would not vote for such a measure.
Due to the Federal tax legislation that was passed at the end of 2017, Idaho’s tax revenues will actually GO UP. Yes, you heard that correctly. Since the federal “personal and dependent exemptions” were eliminated, and Idaho has lots of families with lots of kids (Utah is facing the same issue by the way) the state’s coffers would swell by about $118 million.
So, this legislation is needed just to simply put Idaho taxpayers back on a better playing field. It returns about $200 million back to Idaho taxpayers, resulting in about a $100 million tax cut.
The measure passed out of House committee with unanimous support from Republicans and the two Democrats on the committee voted “no”.
Now that is has passed the house by a resounding margin, you would think that it would sail through the Senate and land on the Governor’s desk. However, there is one Senator standing in the way of that.
Senator Dan Johnson from Lewiston, ID is the chair of the Senate committee that would hear the bill. If he does not want to give it a hearing then he can ruin the whole party and stop the bill in its tracks. So far, he has been unwilling to concede to giving the bill a hearing. He instead wants ample time for his ideas on taxes to be printed and heard in the House, knowing that the ideas have no support and will die a quick death.
Time will tell. Senator Johnson’s phone will probably be ringing with conservatives all over the state asking him to not stand in the way. Our tax rate is simply too high and surrounding states are beating us in all competitions for attracting business and people to the state. That needs to change. The good news is that we can do that this year while simply doing the right thing after the Federal tax changes were passed.