The Idaho House overwhelmingly approved a $51 million tax cut plan Thursday despite hesitation from Republican and Democratic lawmakers unhappy with the deal.
House Majority Leader Mike Moyle (R-Star) is sponsoring the bill, and says the state’s current surplus means Idaho should give a little money back to tax payers. If the bill passes, the first $750 of income would be exempt from taxation, and the top income and corporate rates would be reduced from 7.4 percent to 7.2 percent.
Moyle argues that lowering the tax rate for individuals who earn more than about $11,000 a year (the top-income bracket in the state) would make Idaho more attractive to businesses.
But to Rep. Ilana Rubel (D-Boise), Thursday's House floor debate sounded very familiar.
“I must say, today feels like Groundhog Day in every sense of the word," Rubel says. "I think it was precisely this day last year when I was doing exactly this.”
Rubel says she’s talked with businesses who say that lowering the tax rate matters less than having a skilled and educated workforce.
“The rationale for this bill is competitiveness. Now I’m not saying there’s no marketing advantage to being able to put a slightly lower number on your top bracket tax rate, but there’s a lot of things that go into marketing – there’s a lot of things that business look at. This is one of many. Everything I hear from our business community is actually a far bigger, more important one, is workforce education."
Rubel was joined by other House Democrats and voted against the bill, but they were outnumbered by Republicans. However, multiple Republicans also voiced uneasiness that the bill doesn't address long-term tax relief for Idahoans and instead only provided a small one-time cut.
"I've really been torn over this, because at the heart of the matter, I believe we all need to be frugal," said Rep. Kelley Packer (R-McCammon). "But I do think we need tax reform."
The bill now goes to the Senate, though a hearing has not yet be set.
Find Frankie Barnhill on Twitter @FABarnhill
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