Idaho cannot afford to use $45 million of stimulus dollars to cut income taxes.
This tax "relief" will punch a hole in the state's tax structure — setting up a day of reckoning when Idaho will either have to cut school funding or increase some other tax.
Unfortunately, we've been down this road before. In 2001, lawmakers insisted on permanent and unsustainable income tax cuts, which passed with bipartisan support and contributed to two years of budget cuts.
And unfortunately, I have to somewhat take seriously this latest income tax bill, since it has some legislative juice behind it. Its sponsors are Reps. Mike Moyle of Star and Scott Bedke of Oakley, members of House Republican leadership and heavy hitters on the always tax-averse House Revenue and Taxation Committee. That gives this idea momentum that isn't commensurate with its merits.
Here's the rub. There is, as there usually is, a better way.
If Moyle and Bedke want to push for personal and corporate income tax relief, fine. But why don't they come up with a clear and sustainable way to pay for it? If the goal is a $45 million income tax cut, then identify $45 million of sales tax exemptions for repeal. The state has more than 70 of them to choose from.
Now that's tax reform worth discussing. A rollback on income tax rates could benefit all employers and employees. It could give Idaho a nice marketing tool as it hopes to retain businesses or attract new companies. In short, a broad-based income tax reduction could be better for the state's economy than a narrow sales tax exemption that helps a specific business and does nothing to attract new jobs.
Frankly, it's the kind of tax-reform discussion legislators could have been having instead of sleep walking through the first two months of this legislative session.
Instead, here comes a quick-fix move to cut $45 million in taxes and use one-time stimulus money to pay for it. This is a reckless move that would put school funding at increased long-term risk — and that isn't exactly business-friendly public policy either.
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KR is one of them.
KR, you are confusing me as much as the REV/TAX members.
The topic is an income tax break. Then you launch into the sales tax exemptions
""If the goal is a $45 million income tax cut, then identify $45 million of sales tax exemptions for repeal.""
KR, do you propose they set the income tax cuts as step one and then step two is repeal the exemptions? Of course you are aware income taxes and sales taxes have different uses, right? Starting with the sales tax revenue sharing, your idea simply doesn't balance- step 1 and step 2 do not offset each other.
****
"a narrow sales tax exemption that helps a specific business and does nothing to attract new jobs."
Really?
So a big exemption that tilts the scale for a company deciding between Idaho and Washington in Idaho's favor is not going to create new jobs IN idaho? Geez, I guess all those economic developers in the whole country are wasting their time.
Maybe you ought to stick to the point- using one time money for a tax break is bad tax policy. PERIOD.
Excellent post
Anybody else see the bizarro world twist? Instead of IACI's lobbyists making the pitch to legislators, its House leadership offering federal money to IACI. Time for Idahoans to question for whom their legislators are working.
Sales Tax Axes
KR, since you lit the fuse, here is part II.
Your point, and the often repeated point of the press, some legislators, and some readers, of randomly or across the board repealing sales tax exemptions is also reckless.
I'll note how your editorials often criticize the Governor for making across the board cuts, yet your idea of tax policy (and that of REV/TAX members) says it is perfectly acceptable when deleting exemptions.
The REV/TAX committee prosposing to sunset ALL of the exemptions simply because they do not wnat to analyse and put some thought into each exemption is ridiculous. Equally, for the press to simply shotgun a statement like "identify $45million in exemptions to repeal" is just being lazy.
For every exemption there is an industry or a purpose that benefits. Some exemptions actually make sense. When you want to sweep them all up and make them invalid, someone is going to disagree with it. Some exemptions are good policy. Eliminating them, or putting an additional burden on them of 'reapplying' every X years, is not good policy.
For example, there is a sales tax exemption for sales of animals at fairs and Western Idaho Spring Lamb Sale by 4H or FFA members. Okay, but does there need to be a specific exemption for that one group. AND then the committee wants them to come back and 'lobby' for their exemption every X years. That's ridiculous. It's certainly not a lot of tax money. At the same time the state wants to encourage the youth and our next generation of growers by 'rewarding' buyers of their efforts. It is the buyers (private individuals and companies) that are are actually encouraging those youngsters, right?
So, KR, if you think there is $45million dollars of *easy pickin* tax exemptions available to eliminate, I ask you to lay your cards down. Show us your numbers and where you think the state can start by eliminating exemptions. Also, please explain the group affected and the result to that group when the exemption is repealed. -- That should be a piece of cake for a political editor such as yourself.
Extend the logic...
...and all we need to do is eliminate all taxes, balance the annual budget at $0, and everybody would be happy?
What I'd also like to know is who Moyle and Bedke expect will pay for the Wall Street Journal ad campaign...?
Wanna bet it would be the taxpayers?
We need to change our state motto to 'Esto Perpetua Bardus'.
I thought it was " A convenince store on every block"...
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Welcome to D2, glad you could come to sense the misery we built ourselves
Offer a good idea and the
Offer a good idea and the marching morons come out of the woodwork. We have had 8 years of giving tax breaks to the big boys and we now see how that works. We are almost down the tube and the big boys are counting their profits. Anyone who still believes that the bankers who made the loans lost any money deserve what they are getting. to all the rest of us, let's see more proposals that will help the little guys. I am tired of sending money to Boise that ends up in some big money boy's pocket rather than on my road, or in my school.
Don't let the marching morons discourage you; keep on writing!
Maybe THIS guy has a better idea.
Taken from Boston.com and worth a few seconds.
http://www.boston.com/news/local/massachusetts/articles/2009/03/12/a_head_with_a_heart/?s_campaign=yahoo
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Welcome to D2, glad you could come to sense the misery we built ourselves. Let's tear it down and burn it now!
PS The King is a fink!
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Welcome to D2, glad you could come to sense the misery we built ourselves. When is your pillory time up so I can work mine into the schedule?
I don't get it, I thought businesses create jobs.
How many billions have our elected officials handed out in tax cuts in return for campaign finance & suddenly the politicians say no tax cuts?
It just doesn't make sense, how can we possibly create jobs if we don't give contributors tax cuts & absorb those tax cuts as individuals who drive 70% of the economy?
Otter was good enough to give up $500 of his $4,500 for his housing allowance, we're on the right track now. That $500 is more proof what a good man/Texas ranger Otter isn't.
What kind of fools does think we are? I must have read it wrong. Nobody would expect the people paying to bail out the crooks in DC & banks, & Wall Street, after our representatives were put in office through campaign finance, another $64 million so the FED, SEC, & Treasury would stop public debate into derivatives, & then believe $500 off $4,500 for a housing allowance to live in his own house, is going to do any good. Otter is just like Bush, it's all about him.
The crooks getting bailout money are contributing our money to the same poilitcians handing it out? Madoff has nothing on these guys.
Why don't we give Otter $5,000 instead? Maybe he can buy a better saddle, horse, a rocking horse, or a Viagra patch so he can stay aboard & his insurance, paid for by the taxpayer doesn't go up because we're always paying to fix the gimp.
Where did we get this clown? The same people who voted for Bush no doubt voted for Otter & the rest of US have to pay the rest of our lives for the ignorance.
I hope democracy takes hold in Iraq & the rest of those backwards countries, just a little more advanced than we will be soon. It's the only way we'll ever come out ahead. Everything our representatives do cost US billions, we're trillion in the red, & we're spreading democracy like a disease all over the world. Terrorist in Iraq were never the threat terrorist on our payroll in DC are!
Communism would be a step up at this point, even the Russians are telling US we can't win in Afghanistan. Wow, that's news?
Bush put the hunt for bin Laden on hold in Afghanistan to settle a personal vendetta in Iraq, screwed up for years costing billions, broke US while the Bush family made millions if not billions on oil that broke US, we're crawling out of Iraq just like Vietnam, people like mtomlin suggest victory, & we're going back to Afghanistan?
Genius, no wonder I couldn't see it.
The funniest part is the outrage toward Madoff. The working class American people being taken in the greatest scam of all time, democracy & this two party joke driven by campaign finance, costing US trillions, don't have a clue while the millionaires taken by Madoff are the news wanting to stone him?
Madoff stole billions, we're being taken for trillions, & the poor millionaires losing in the Madoff ponzi scheme are the headline? Are the American people that easy to manipulate?
The Franklin Cover-up by John DeCamp tells all about the republican party years ago, they manipulated that into an injustice & we're still paying. Old man Bush was in the middle of that mess & we're paying again for Dubya's screw up now. Dubya learned well from daddy, out did him on a grand scale, & they walked away with more money this time.
If the American people don't demand full financial disclosure by all our representatives, their families, {like Madoff} the FED, SEC, Treasury, all government employees, bank CEOs, & Wall Street, we'll never come out of this mess. Start with Bush & Cheney, Congress, Senate, FED, SEC, Treasury, banks, Wall Street, AIG, & work our way down.