Over the last three years, Idaho, like most states across the country, has had to slash its budget in the wake of the Great Recession. The state has gutted education and health care spending, slicing its higher education budget below 2001 levels, while cutting millions from its mental health funding.
But as the same time that they felt the need to cut funding for these important areas, Idaho Republicans managed to find tens of millions of dollars to cut the state’s top tax rate and corporate tax:
A $36 million tax cut for Idaho’s top earners is roaring through the Idaho Legislature, backed by Gov. Butch Otter and co-sponsored by a majority of the members of the Idaho House.
The move comes even as Idaho’s reeling from three years of deep budget cuts to everything from schools to Medicaid, very few of which are being restored. [...]
The bill would lower Idaho’s top individual income tax rate from 7.8 percent to 7.4 percent, and lower the corporate tax rate from 7.6 percent to 7.4 percent; that would take $35.7 million out of the state’s tax revenue stream next year and every year thereafter.
State House Tax Chairman Dennis Lake (R) opposes the bill, saying, “we are creating a structural deficit in our revenue stream that we cannot deal with, without at some time in the future raising taxes.” 20 members of the Idaho house — 12 Democrats and eight Republicans — voted against the bill.
Already, Idaho’s tax system is regressive, with its poorest residents paying a larger share of their income in taxes than its richest residents. Adding some insult to injury, Idaho’s lawmakers also decided to shoot down a bill that would have cracked on on tax dodging that is aided by internet sales companies like Amazon.