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Income tax cut HB 436 headed to Governor's desk

Posted at 5:59 AM, Feb 01, 2022
and last updated 2022-02-01 14:56:33-05

BOISE, Idaho — Inside the statehouse Tuesday, the largest tax cut in state history is headed to the governor's desk after passing the Senate.

After 45 minutes of debate and a failed attempt to amend the bill and add a repeal of the grocery tax, Senators voted 27-7 to pass the bill.

It would provide $600 Million in tax cuts and rebates.

It includes $350 Million in one-time rebates and about $251 Million in ongoing income tax relief starting in the fiscal year 2023.

The bill — brought early on into the session — looks to consolidate the income tax brackets from five brackets to four, while also lowering rates, according to lawmakers

House Bill 436 is part of Gov. Brad Little's plan for the $1.9 Billion budget surplus.

Each vote on this bill—in committees and on the house floor—has been mostly along party lines, Republicans voting for the bill and Democrats voting against it.

As this income tax cut bill has been moving through the legislative process, some have questioned whether this is what taxpayers want.

"I've had thousands of emails and not a single person has asked for an income tax reduction. They’ve asked for help on their property taxes and for something to be done with the taxes on groceries. That's what’s really hitting them every single day,” Democratic Senator Janie Ward-Engelking of Boise said.

The Senate floor sponsor of the bill, Republican Sen. Jim Rice of Caldwell, said legislators should look beyond their inboxes.

"I think it's important that we look at the BSU survey on what Idahoans want as far as what kind of tax relief they want to understand where Idahoans are instead of just looking in our own emails," Rice said.

Boise State University's annual Public Policy survey says 37.4% of Idahoans want income tax relief and 37.7% want property tax relief.

As we've reported, Democratic lawmakers and Idahoans testifying at committee hearings have also expressed concern that the bill benefits the wealthiest Idahoans most.

"The fallacy people fall into is saying the number of dollars you get means you get less tax relief if somebody else gets more dollars. But in reality, that other someone--the wealthier Idahoans or the people with higher incomes will still be paying a lot more taxes than people that make less," Rice said.

As Idaho News 6 reported last week, Democratic lawmakers announced their alternative proposal.

Both Republicans and Democrats have introduced legislation to repeal the grocery tax and to provide property tax relief snd Rice said more property tax relief bills are in the works.