As promised, House Republicans introduced a massive tax cuts and rebates bill as the first proposal of the year.
The plan would retroactively lower the top personal income tax and corporate income tax rates to 6% starting in January 2022. It would also give state taxpayers a refund equal to 12% of their 2020 taxes, or $75 per person, whichever is greater.
“Money is out there that should also be returned to taxpayers. If I consider who is spending the most money, I’m going to go after the person who earned it,” said Rep. Steven Harris (R -Meridian), which is sponsoring the bill.
Idaho is expected to post a surplus of $1.9 billion this year, which Governor Brad Little also wants to spend on improving infrastructure and paying down debt, among other priorities.
The refund proposal would cost $350 million, while income tax cuts would total more than $1.1 billion over the next four years.
Deputy House Minority Leader Lauren Necochea (D-Boise) said the money could be better spent offsetting high property taxes or repealing the food tax.
“It’s just not the tax relief I think Idahoans want,” Necochea said.
Democrats have also argued that the surplus should fund schools better, as Idaho consistently ranks among the states with the lowest spending amounts per student in the nation.
Harris countered that taxpayers could direct that money to multiple public funds instead of keeping it.
“People can choose to donate it to public schools, transportation, parks and recreation,” he said.
In the income tax part of the bill, the number of brackets is further reduced from five to four. The top earners in Idaho are considered to be those earning more than $5,000 per year.
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