Adam’s Blog

That’s my thing, keepin’ the faith, baby. –Joe Friday

Tax Update

Posted by Adam Graham on March 16, 2007

I’ve got so many tax stories, I’m going to let them out in one post rather than making several.

US Senate Democrats propose a tax increase of $900 billion over the next five years. As we said in the campaign, hold onto your wallet.

Meanwhile here in Idaho, the Idaho State Senate voted 34-0 to approve the Amended grocery tax credit increase bill. Said Senator Russ Fulcher (R-Meridian) spoke to the Spokesman-Review:

“I respect the gentleman on the second floor a lot, and I think that most of the time we agree on issues,” said Sen. Russ Fulcher. “On this particular one, we disagree. … Yeah, it might get a veto – it may not.” He added, “We are the legislative branch, and we have a voice in this.”

This is now a battle of wills. The State House voted 62-7 and the Senate voted 34-0 for the bill. If the Governor vetoes it directly, it will be overturned, if 24 Senators and 47 Representatives will hold firm. Of course, the Governor can pocket veto the bill if the legislature adjourns within 10 days and I’ve heard tell that they’re aiming to get out of dodge in a week.

The $100 million business tax break died in committee in the Senate, which makes sense. While folks are paying taxes on food, it seems a tad extravagant to give that type of tax relief to business. I also have to wonder whether it would actually do much for our state’s economy, so I’m not sad to see it die.

Finally, the Senate voted 31-3 to study Idaho’s Sales Tax Credits and exemptions. Of course, the legislature’s been there recently. Everybody hears the huge numbers and thinks there’s a cash cow there. Really, there’s not.

Going through the 2004 report, they estimated a cost of $1.3 billion. What was that made up of?

Health Services=$246 million. Do you really want to tax health care isn’t the cost high enough. That quickly goes off the table.

Professional Services (like Attorneys, Engineers, etc.)=$167.7 million. Do we want to drive up the cost of doing business in Idaho? Nope, and that one goes off the table.

Construction=$118.8 million-Yeah, lets make building new homes more expensive. Not a plan.

We’ve just taken out $531 million of the $1.3 billion pie. Searching through the document, you find some tinkering that can be done. People can pay taxes for cable and sattelite dishes, repairs, and trips to the dry cleaner, but I doubt anyone can get to a $100 million figure. It seems to me that studying an issue that’s been studied to death isn’t going to solve much, I’d like to see a proposal to shift some of these moneys around to provide tax relief in other areas. Otherwise, I think we’ll just waste taxpayer time and money.


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