Idaho tax cut would only beneÿt top earners

Extra revenue should first be used to help replenish funding to rainy-day accounts and education, which have taken cuts

   A compliant Idaho House has approved Gov. Butch Otter’s $35.7 million income tax cut, which on the surface seems to be good news for the upper crust of taxpayers. But guess how much tax relief would go to the 83 percent of Idaho taxpayers who may be living paycheckto-paycheck.

   None. That’s right, zip, zero, nada.

   The tax cut, which probably won’t survive in a Senate more in tune with the ordinary Idahoan, would lower the top income tax rate to 7.4 percent from 7.8 percent, while cutting the top corporate tax rate to 7.4 percent from 7.6 percent.

   The Idaho Tax Commission estimates people with gross incomes starting at about $36,000 could qualify for relief, and married couples filing jointly would begin to qualify starting at about $72,000. That would cover about 17 percent of Idaho taxpayers.

   If the lawmakers want to give the taxpayers a break, it probably could be justified because the state is sitting on a projected surplus of $103 million. But the wealthiest among us needn’t get all the relief.

   Besides, even House Majority Leader Mike Moyle acknowledges some of that surplus needs to go back into education and rainy-day accounts, which is a good idea since those took a hit in the last couple of years.

   Rep. Dennis Lake, a Republican who has announced his retirement after this year, injected a note of caution. He thinks the state’s revenues must grow by 7.8 percent annually in coming years to satisfy the Otter cut, and that’s well above the 4.5 percent growth that legislators now foresee.

   “We did not hear one economist in the state of Idaho who said we would have 7.8 percent growth,” said Lake, who voted against the cut, which was opposed by 13 Democrats and seven Republicans.

   That would mean the state would once again be unable to afford the services it requires.

   Yes, it will, thinks Moyle. “This is probably the best economic development bill we’ve seen all year. It sends a message that Idaho is open for business.”

   House Minority Leader John Rusche, a Lewiston Democrat, has another opinion. “This is a tax cut for the top income earners, when we still have folks paying sales tax on food and clothing. It’s not fair at all,” he says. “We have a half-billion dollars in deferred maintenance, the cuts in Medicare and Medicaid are dumping costs onto our counties, we’ve cut education funding for higher ed and public schools... So how is it responsible to cut taxes?”

   Not to worry, says House Majority Caucus Chairman Ken Roberts, a Donnelly Republican. He suggests the Senate will repair the financial damage in what he calls a “rough draft” — a move in a chess game.

   In the best of worlds, a rebounding economy will enable the state to cut taxes for corporations, as well as for wealthy and ordinary citizens, and still pay for critical needs.

   But the Senate will have to take a hard look at the cuts coming its way now.

   n This view is from the Idaho State Journal editorial board in Pocatello.
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Those of you who don't know me, I'm a Democrat in a very, very Republican state.  Our governor is Butch Otter...that's right, Butch and Otter are real names.  He, of course, follows the party line completely.  Here's the latest gaff:


   A compliant Idaho House has approved Gov. Butch Otter’s $35.7 million income tax cut, which on the surface seems to be good news for the upper crust of taxpayers. But guess how much tax relief would go to the 83 percent of Idaho taxpayers who may be living paycheckto-paycheck.


None. That’s right, zip, zero, nada.


The odds of it passing through the Senate is probably not going to happen, but this is just an example of what George Dubya Bush called Voodoo Economics.  That is, giving to the rich will benefit the poor.  If you believe that, I've got some beautiful swampland in downtown Phoenix for sale cheap.  This is the Conservatives idea of 'trickle down' economics.  Give to the rich, they'll give back to the poor in the form of factories in which to work.  Problem is, that doesn't happen.  The rich take that money and invest it...sometimes overseas, sometimes they put it in banks offshore.  The effect is only the rich benefit when you give money to the rich.


The rich are rich because they are money managers.  They spend your money, not theirs.  They invest their money so money makes money and they don't have to make anything.  Oh, there are always examples of rich people doing good with their money, but those folks are in the minority.


I can hear my Republican friends saying, but they are rich because they 'earned' that money and they should be able to keep it.  I have no argument with that.  What I have a problem with is the companies overseas owned by American Businessmen.  Even Toyota and some of the other Japanese companies have moved their opperations to the U.S.  So, why are the Americans still overseas manufacturing sneakers?  The answer is simple, Money...greed.  They can make more money overseas because labor costs are minimal overseas so the profits are huge.


So, do I feel bad for the rich when the President wants them to pay their fair share?  Nope.  If they control 90% of the money, they should pay 90% of the tax burden.  Oh, that's not really how I feel, but I think they should pay 50%.