|
Trump tax bill will cost Idahoans |
|
January 19, 2018 |
 |
| Ronald Nate
and his former student Emma
Schwarze, now an intern for Veritas
Advisors, enjoying a morning in the
Revenue and Taxation Committee.
|
|
By Idaho Representative Ronald Nate
Every year one of the first bills in the Idaho
legislature is the Tax Conformity bill. This
bill updates Idaho’s tax law making Idahoans'
adjusted gross income (AGI) be the same as is
calculated on their federal tax forms. This
makes taxes for Idaho very easy to calculate
because you just take the AGI from the federal
form and use it on your Idaho tax form.
Easy peasy.
Conformity in general is efficient for
accounting purposes, but in past years I have
argued against conformity for two specific
reasons: one, when the federal government
incorporated same sex marriage into tax code,
conformity makes Idaho do the same (in
contradiction to the Idaho Constitution); and
two, any changes in tax law at the federal level
automatically impact Idaho taxes — in effect, we
allow the federal government to write state tax
law.
This year, issue number two hits Idaho hard. The
federal tax reform (President Trump’s big tax
bill) passed this December is a big tax
reduction for federal taxpayers. The Trump tax
cut is a huge bonus for taxpayers; it was long
overdue and it will be great for the economy.
But, because the tax reform eliminates the
personal and dependent exemptions from AGI, our
tax conformity makes it result in a significant
tax increase for Idaho state income tax payers.
Idahoans will see a $97.4-million increase in
their state income taxes with the Tax Conformity
bill.
Literally, the federal tax reduction bill,
through conformity, writes a tax increase into
our state income tax laws. We owe it to Idaho
taxpayers to cut taxes to both offset the
conformity and to return the other large
unexpected tax collections to Idaho taxpayers,
which are rightfully theirs.
Latest estimates have tax collections in Idaho
for fiscal year 2018 to be at least $300-million
ahead of projections.
That’s right, way more money is flooding into
the capitol than even the financial experts
expected. Combine this with the unexpected tax
collections from Idaho conformity to the federal
tax code, and by year’s end taxpayers will have
sent in more than $400-million beyond
expectations.
This is not new.
For the past several years, more taxes have come
in than was expected (over $200 million last
year). In 2018, we need to break the trend of
spending up the excess and even borrowing at
times. Fiscal conservatism is a thing.
It is time for serious tax relief.
Last year the Governor vetoed the grocery tax
repeal after the session ended. There is enough
support to overturn a veto should he try that
again. A full 59-percent of Idahoans support the
repeal of the grocery tax, according to a recent
poll by BSU Public Surveys.
Another 28-percent support income tax
reductions.
We can, and should, do both. The Idaho
government does not need this extra money. Let
your legislators know who this money rightfully
belongs to, and how it should be returned to the
hardworking families in Idaho who earned it.
For me, being an economics teacher is fun. One
reason is ... well ... it's economics—
practically synonymous with fun! Another reason
is I get to teach and work with some amazing
students. This session, I get the extra bonus of
seeing and working with one of my star economics
students.
She is Emma Schwarze, and she is working in the
Capitol as an intern for Veritas Advisors during
the 2018 legislative session. They are lucky to
have her on board and she’s doing a great job!
Please visit the
Growing Freedom Idaho website to help all
citizens be more involved with what is going on
in the Idaho Legislature and how to effectively
make their voices heard. The site includes a
Freedom Agenda of legislation brought to the
legislature by citizens and is what liberty
minded legislators are pursuing this session. |
|
Questions or comments about this
letter?
Click here to e-mail! |
|
|
|
|
