Idaho Republicans ahead of the 2010 Legislature are pushing to cut individual and corporate income taxes by more than a third over the next decade, saying it would lure businesses and pump life into the state’s slumping economy.
Idaho’s corporate income tax rate is 7.6 percent; for individuals, it’s as high as 7.8 percent. Both would be slashed to 4.9 percent under the plan from House Majority Leader Mike Moyle, and fellow GOP Representatives Raul Labrador, of Eagle, and Marv Hagedorn, of Meridian. It’s now being vetted by state tax officials.
Stretching out the tax cuts over 10 years would mitigate immediate impacts to state general fund tax revenue, already trimmed by 20 percent over two years as the economy sputters. Some revenue could also be recovered, possibly by dumping an investment tax credit for businesses worth 40 million dollars annually.
But the three House tax hawks say the net effect of any changes should be a reduction for Idaho residents and companies that employ them. Idaho rates for individuals and corporations are higher than surrounding states, which the three contend means the state loses out when companies looking to relocate compare taxes, then go elsewhere.
According to the state Tax Commission, in the 12 months ending June 30, Idaho individual income tax collections were $1.48 billion, down 13 percent from a year earlier. Corporate collections fell 18 percent to $175 million, as businesses including computer chipmaker Micron Technology Inc. racked up losses. (AP)
