Will Tax Cuts Leave Big Idaho Families In The Lurch?
According to the nonpartisan Idaho Center for Fiscal Policy's analysis of the House bill passed last week, families that fall in the top 5 percent of earners, with three or more children will see a decrease in taxes. However, middle-class families will actually see an increase in their taxes.
For big families with incomes between $49,000 and $63,000, it will mean an average of $415 extra on their tax bills. Alejandra Cerna Rios, policy analyst with the Idaho Center for Fiscal Policy, said lawmakers tried to shield large families with a child tax credit.
"The design of the child credit that's included in this proposal puts it out of reach for households where it would really make a big difference in the family budget," Cerna Rios said. "So, by restricting eligibility, some families with kids who owe very little in state income taxes won't benefit from the credit, even if they contribute a lot already through sales, excise and property taxes."
Legislators would need to more-than double the child tax credit in the bill in order to offset the losses for big families, according to legislative budget analysts.
House legislators are mirroring cuts made at the federal level, at the request of Gov. Butch Otter. Supporters of the tax cuts say it will make Idaho more attractive to businesses.
Cerna Rios said the tax cut will cost Idaho more than $100 million.
"That would reduce the level of resources that Idaho has to apply towards some of our basic services that most residents use, like schools and health care, building roads and some other important services," she said.
Cerna Rios said those dollars will be needed, especially as the Idaho's population grows rapidly.
The bill's fate in the Senate remains uncertain. Some in the Senate have indicated they would like to conform with federal tax cuts differently than the House bill.