Idaho House Republicans push through historic tax cut

House Republicans overwhelmingly supported the largest tax cut in Idaho’s history Thursday less than two weeks into the 2022 legislative session.

“Frankly, this is one of my favorite tax bills…that we’ve ever done since I’ve been here because it’s $600 million back to the people,” said House Assistant Majority Leader Jason Monks (R-Meridian).

That $600 million would be spent in the first year by lowering Idaho’s top personal and corporate income tax rate to 6%, as well as funding a rebate program. The rebate would refund 12% of a person’s 2020 income tax return, or $75 per person, whichever is greater.

Over four years, the total bill adds up to more than $1.5 billion.

“This will increase the budgets of every Idahoan that’s paying taxes,” Monks said.

But Democrats questioned who would benefit most from the proposal.

House Assistant Minority Leader Lauren Necochea (D-Boise) said every tax change affects how wealth is redistributed.

“This one is a reverse Robin Hood-type and I don’t think that’s what Idahoans want,” Necochea said.

Both she and House Minority Leader Ilana Rubel (D-Boise) pointed out that wealthier individuals would see more of a benefit proportionally under the plan than lower-income residents.

Rubel also pushed back against Republican lawmakers who said efforts to alleviate rising property taxes and boosting education funding will be taken care of by the projected $1.9 billion surplus.

This is the first bill passed by either legislative body this year, with budgets still weeks away from being proposed by the Joint Finance and Appropriations Committee.

“It’s just very frustrating that there’s a feeling that, ‘That stuff can wait. First thing’s first, we’ve got to cut $13,000 checks to millionaires,” Rubel said.

“I’m really tired about hearing how terrible millionaires are,” said Rep. Caroline Nilsson Troy (R-Genesee).

Troy said she’s spent her career as a fundraiser who’s worked closely with the state’s wealthier residents.

“The millionaires in Idaho are not trust fund babies. They weren’t given it, they weren’t handed it,” she said. “And those folks are the first people we go to in our communities when we need help.”

Rep. Fred Wood (R-Burley) said there were a couple of reasons he was the only Republican lawmaker to join with all 12 Democrats in opposing the bill.

First, the $1.9 billion surplus is simply a projection. Idaho’s largest tax collection months, historically, are April and June and both are predicted to bring in more than $600 million each this year.

Secondly, Wood said, much of that money is coming from Idaho’s rapid population growth. It could be spent on one-time projects to build new infrastructure and repair aging roads and bridges to accommodate that growth.

“What we’re about to do is cut the revenue stream that is going to allow us to do that into the future,” he said.

Gov. Brad Little’s proposed budget would direct $400 million to cover all known transportation-related deferred maintenance and allow local governments to fix about one-third of deficient bridges. Lawmakers have yet to act on that request.

The bill now heads to the Senate for consideration.

Follow James Dawson on Twitter @RadioDawson for more local news.

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