Idaho House passes $600 million tax cut bill

BOISE — A $600 million tax cut bill advanced through the Idaho House on a 57-13 near-party-line vote Thursday, following a 90-minute debate.

The legislation, which is supported by Gov. Brad Little, includes a one-time $350 million rebate, as well as an ongoing $251 million reduction in income tax rates.

House Bill 436 was the first measure introduced in the Legislature this session, and the first to pass either the House or the Senate.

House Majority Leader Mike Moyle, R-Star, said Idaho’s 6.5% top tax bracket is a barrier to economic development because it discourages businesses from relocating or expanding here.

HB 436 cuts the top bracket to 6% for both corporations and individuals.

“This moves Idaho in the right direction,” Moyle said.

Rep. David Cannon, R-Blackfoot, said the issue for him is whether lawmakers want bigger government or smaller government.

“I’m in the camp of smaller government, and the best way to achieve that is when we have an opportunity to cut taxes,” he said. “Let’s take this opportunity to rein back a little and stand for smaller government.”

Cannon also disagreed with the practice of taxing wealthy Idahoans to pay for state government to then turning around and give the money to those most in need once there’s a surplus.

“That’s my definition of wealth redistribution, and I’m not in that business,” he said.

Burley Rep. Fred Wood was the only Republican to vote against the legislation. Every House Democrat opposed it.

“I want tax cuts. I just want tax cuts that will actually help people, and help those who need it,” said House Minority Leader Ilana Rubel, D-Boise.

She noted that the top 1% of income earners will get rebate checks worth thousands of dollars, while those at the bottom will collect the $75 minimum.

Republicans can brag all they want about this being the biggest tax cut in state history, Rubel said, “but most people are going to get a $75 check.”

Of all the possible forms tax relief could have taken this session, she said, HB 436 provides the least benefit to the greatest number of people. It also takes away any opportunity to provide significant property tax relief — something people across the state are clamoring for — or to eliminate the sales tax on food.

“This bill rules out other tax cuts that Idahoans want,” Rubel said. “Those options disappear once we take $600 million off the table.”

Several Republicans disputed that notion, saying there’s still room for additional tax relief this session, given the projected $1.9 billion budget surplus.

“I agree, like many of you, that there should be more tax cuts, and property tax (relief) is something that’s needed,” said Rep. Lori McCann, R-Lewiston.

However, she also noted that the economy in her region isn’t growing as fast as other parts of the state, which is why she supports this bill.

“North central Idaho and rural communities really are suffering,” she said. “We need some encouragement for businesses to come. We need to inspire and encourage growth in our business world.

Rep. Caroline Troy, R-Genesee, said it bothers her to hear how only the wealthy will benefit from this tax cut and how “terrible” millionaires are.

“Idaho millionaires aren’t trust fund babies,” she said. “They earned it; it wasn’t given to them. And (these) folks are the first people we turn to in our communities when we need help ... By god, this state has benefited from our millionaires, and I’m thankful for them. If this tax break benefits them, I know that money will come back to help communities everywhere in the state.”

The legislation now moves to the Senate for further action.

Spence may be contacted at bspence@lmtribune.com or (208) 791-9168.