$600 million income tax proposal heads for Idaho home floor | Idaho
The Idaho Legislature’s Revenue and Taxation Committee proposed the largest tax cut in Idaho history on Tuesday, proposing a $600 million proposal to provide tax refunds. tax and reduce income rates on the House floor.
If enacted, House Bill 436 would provide $350 million in income tax refunds to Idaho taxpayers this year and spend $251 million a year to cut tax rates on personal and corporate income from 2023.
Republicans who guided the bill during its committee hearing said the state has a unique opportunity to use the projected $1.9 billion surplus to cut taxes and provide some of the biggest investments. important in funding education and transportation in Idaho’s history.
“It’s helpful to everyone in Idaho,” said House Majority Leader Mike Moyle, R-Star, who is one sponsors of the bill. “Every Idahoan benefits from this bill. I want to emphasize that.“
Moyle said the state has enough revenue and surpluses to cut taxes and invest in education and transportation.
“You’ll hear if this bill passes, there’s no money for education – that’s not true,” Moyle said. “In fact, the ongoing costs of this bill will be less than the ongoing K-12 budget increases. We will take care of education.
During a 75-minute public hearing Tuesday at the Idaho State Capitol in Boise, several influential organizations and advocacy groups spoke in support of the bill, including Associated Taxpayers of Idaho, Idaho Chamber Alliance (a federation of small businesses), the Idaho Trade and Industry Association, and the Idaho Freedom Foundation.
On the other hand, Idaho residents who testified about the bill opposed it, saying lawmakers should focus on investing even more surplus and increased revenue in the education and transportation while reducing property tax rates or repealing the sales tax on groceries.
Latah County resident and retired teacher Kathy Dawes testified remotely on Zoom, where she said the surplus was the result of underfunding for education. She also said lower personal and corporate income tax rates would benefit those who need it least.
“Instead of tax cuts, please use our taxes to ‘establish and maintain a uniform and comprehensive general system of free public schools,'” Dawes said, citing the Idaho Constitution.
Two Democrats and a hardline Conservative on the committee suggested the Legislature would do more to help regularly working Idahoans if it focused on reducing property tax rates or even the sales tax on produce. grocery store.
“As we heard from constituents who testified today, that’s not what they want to see us do with the dollars we’ve been sitting on the bottom line,” said Rep. Lauren Necochea, D -Wooded. “There is a lot more value in repealing the grocery sales tax or allocating those dollars and using them to somehow lessen the impact on property taxes. It’s not the priority of the people of Idaho, and it’s just too unbalanced.
The invoice includes both one-time and recurring costs.
- The $350 million in one-time rebates would be sent in 2022 and paid from the state budget surplus.
- Reducing the top tax rates to 6% and reducing the number of personal income tax brackets from five to four would cost $251 million per year, starting in fiscal year 2023. Of that $251 million $94 million would come from the tax relief fund, which is made up of money from sales tax paid on online purchases. The remaining $157 million would come from the state’s general fund.
Miguel Legarreta, president of Associated Taxpayers of Idaho, said passage of the bill would reduce taxes for a hypothetical married couple in Idaho with two children who earn $110,676 with taxable income of $84,976. around $962. Legarreta said that breaks down to $582 via the one-time discount and $384 ongoing.
House Bill 436 heads to the House floor with a recommendation that it adopts. The Idaho House of Representatives could call the bill for a floor vote as soon as this week. If the bill passes the House, it will head to the Idaho Senate and go to a committee to repeat the process that began in the Idaho House.
If signed into law by Idaho Governor Brad Little, the bill’s new tax rates would be retroactive to January 1, 2022.
New Idaho Individual Tax Rates Under House Bill 436
Less than $1,000 of taxable income: 1%.
From $1,000 to $3,000: $10, plus 3% of the amount over $1,000.
$3,000 to $5,000: $70 plus 4.5% of the amount over $3,000.
$5,000 or more: $160, plus 6% of the amount over $5,000.
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