A proposed $389.4 million tax cut and rebate plan is heading out of committee to the full Idaho Senate for amendments.
The ambitious tax cut plan would slash personal income tax rates across the board. The top tax rate, which includes anyone earning more than $11,760 per year, would be cut to 6.5%. Those same cuts would apply to the corporate income tax rate as well.
As Boise State Public Radio previously reported, the rebate would be based off of a person’s 2019 tax filing. They’d get a $50 minimum per person and dependent or an amount equal to 9% of state tax they paid that year, whichever is greater.
Some Democrats have questioned whether the potential tax cut could jeopardize federal COVID relief money. But a U.S. Treasury spokesperson told the Associated Press there's no blanket prohibition on tax cuts as long as the federal funds don't backfill program costs that would've been covered by state money.
Kathy Dawes testified against the bill on behalf of the League of Women Voters. She said that money should be used to better pay for education in the state.
“Using income tax dollars to fund education will result in a reduced need for supplemental levies, thus lowering property taxes, which is really what Idahoans need,” Dawes said.
Idaho public K-12 schools set another record for the 2020-2021 academic year when it comes to supplemental levies,according to Idaho Education News. They’ll collect $216.6 million through property taxes.
Idaho ranks 50th out of all states and Washington, D.C.in terms of per pupil spending, though it ranks 23rd inU.S. News and World Reports’ Pre-K-12 educational outcomes survey.
Despite reservations from education advocates, supporters of the bill, like Alex LeBeau of the Idaho Association of Commerce and Industry, said putting money back into people’s pockets will ultimately be beneficial for everyone.
“They’re going to reenter the economy and come back as even more tax revenues back to the state of Idaho,” LeBeau said.
The bill now awaits possible amendments in the Senate, which could include an attempt to consolidate Idaho’s seven personal income tax brackets.
Follow James Dawson on Twitter @RadioDawson for more local news.
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