House Republicans are pushing forward a massive tax cut plan introduced less than a week ago.
After little opposition, the bill passed out of the House Revenue and Taxation Committee Tuesday morning after.
The measure would drop Idaho’s top income tax rates for people and businesses from 6.5% to 6%. It would also give a 12% rebate to those who filed income tax returns in 2021, or $75 per dependent, whichever is greater.
In total, the initiative would cost more than $1.5 billion over the next four years.
Rep. Tammy Nichols (R-Middleton) said she reluctantly supported sending the bill to the House floor, calling the relief to taxpayers “breadcrumbs.”
“Breadcrumbs can still feed you a little bit. It is not total nourishment, but it does give you a little something,” Nichols said.
She and Democratic critics of the bill said their constituents haven’t been clamoring for income tax cuts. Instead, their priorities are reducing property taxes and eliminating the state sales tax on groceries.
In the past, Rep. James Ruchti (D-Pocatello) has proposed using this year’s projected $1.9 billion revenue surplus to wipe out supplemental school levies that fall on the backs of property taxpayers.
By ushering this tax cut so quickly, Ruchti said, it ties the hands of lawmakers who could come up with a better solution.
“My big concern is that right out the gate, we’re making a decision that $600 million is heading this direction and we’re not going to be able to claw it back once we make that decision,” he said.
House Majority Leader Mike Moyle (R-Star) defended his bill, saying other pieces of the state budget aren’t being overlooked.
“We’re going to take care of education. We have enough money to do it all,” Moyle said.
Gov. Brad Little’s (R) proposed budget would boost education spending by about $300 million, though the majority of that would go to teacher and staff raises.
Three citizens testified remotely in opposition to the bill, aligning with Democratic talking points.
Several business groups supported the move, saying it would make Idaho more competitive with surrounding states whose corporate income tax rates are generally lower.
The bill could come up for a vote by the full House later this week.
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