Sunday, March 4, 2012

Idaho Cuts Education, Health Funding–And Taxes For Rich, Corporations

Idaho provides us with the essence of Republican fiscal policy. Following massive cuts to education and health care, what's the next step? According to Gov. Butch Otter (left) and most Idaho Republicans, it's to cut taxes for the wealthy and corporations, of course. One GOP supporter of the plan justifies it by stating that "we're collecting too much" money. Not enough, apparently, for schools and Medicare–but what do such programs matter? The gap between the tax cuts and the state's needs couldn't be more obvious:

A $36 million tax cut for Idaho’s top earners is roaring through the Idaho Legislature, backed by Gov. Butch Otter and co-sponsored by a majority of the members of the Idaho House.

The move comes even as Idaho’s reeling from three years of deep budget cuts to everything from schools to Medicaid, very few of which are being restored.

“The governor has recommended that we not collect this money, that we’re collecting too much,” said Rep. Marv Hagedorn, R-Meridian, one of the bill’s 40 house co-sponsors; the Idaho House has 70 members.

The bill would lower Idaho’s top individual income tax rate from 7.8 percent to 7.4 percent, and lower the corporate tax rate from 7.6 percent to 7.4 percent; that would take $35.7 million out of the state’s tax revenue stream next year and every year thereafter.

Opponents of HB 563, who included 12 Democrats and eight Republicans in the House, say the state can’t afford a tax cut right now, when it’s still struggling with the impact of three years of budget cuts. They’re also raising questions about whether trimming taxes really constitutes economic development.

“Every study I’ve seen says cutting taxes in and of itself does nothing to further economic growth, even though I recognize that’s a strong belief by many in this body,” said Rep. Bill Killen, D-Boise, who said he thought investing in higher education would have more impact. “I certainly don’t think giving money back in the hope that it’ll somehow generate jobs is a very intelligent way to go about it.”

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