The Idaho House Republican leader previewed a slate of large tax cuts Idahoans could see this year, beginning with a potentially historic cut to individual and corporate income taxes.
The cut would bring Idaho’s flat income tax rate to 5.3%, down from the 5.695% that it is currently, which the state estimates would amount to a $240 million reduction in revenue.
House Speaker Mike Moyle told a House committee Thursday that his bill is “probably the biggest income tax cut in Idaho history.”
Moyle said he plans to propose further cuts to sales tax and property tax in the coming days.
Republican Gov. Brad Little proposed a $100 million tax cut during his annual address earlier this year, bragging that officials have cut taxes by $4.6 billion over the last six years. But Moyle has said he wants more, and aims to approach $5 billion in reductions by the end of the year.
“I hope that we can work together to try to drive taxes down in the state of Idaho,” Moyle told the committee. “This is an opportunity to get it done while the iron’s hot.”
Democrats expressed concern that the tax cut could jeopardize the state’s obligation to fund essential services for citizens. Idaho is second-to-last in per-pupil funding for education of all states plus Washington, D.C.
Assistant House Minority Leader Steve Berch, a Democrat, said he opposed the proposal because it was missing a broader analysis of what programs the state needs to fund this year, and how much money will be needed to pay for them.
“It’s hard to make a decision on whether to support something when you’re only looking at one side of the ledger,” Berch said, before voting against introducing the bill.
Democratic Rep. John Gannon said he was concerned the income tax cut would jeopardize the possibility of amending the state’s grocery tax, which has become a hot-button topic at the Legislature.
In addition to cutting income taxes, Moyle’s bill would also expand a tax exemption for military pensions to allow retired veterans with disabilities to deduct their benefits as long as they have a job. The current exemption allows retired, disabled veterans 62 and older to do so, as well as all veterans older than 65.
The proposal would also remove capital gains taxes from transactions of gold and silver, or bullion, allowing residents to reduce their taxable income.
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