Idaho Governor Urges Tax Reduction

In his State of the State address, Idaho Gov. Butch Otter (R) urged legislators to reduce taxes, endorsing particular legislation by name:

When President Reagan signed the landmark Tax Reform Act of 1986 into law, he cited the need to secure Americans’ economic freedoms. He cited the need to “restore certainty to our tax code and our economy.” And he cited the fact that – as he put it – “ultimately the economy is not made up of aggregates like government spending and consumer demand, but of individual men and women, each striving to provide for his family and better his or her lot in life.”

With that in mind, I encourage you to seriously consider legislation being introduced by Representative Marv Hagedorn. His bill would equalize and then gradually reduce our marginal State income tax rates for individuals and businesses over ten years, starting in 2013. But whether it’s that bill or an alternative, we need a long-term plan for reducing the tax burden on our citizens. That will go a long way toward providing a competitive advantage for Idahoans, stimulating economic growth and expanding our tax base.

The Idaho Reporter explains the Hagedorn bill:

Hagedorn’s bill is a 10-year plan that would lower personal and corporate income taxes in the state to a flat 4.9 percent, making it one of the lowest rates in the United States.[…]

The 10-year slide in rates can be stopped if the economy is slumping and the governor orders a reduction in spending or asks the Idaho State Tax Commission to delay implementation of the rate decrease. “There are triggers to protect the state’s general fund,” said Hagedorn.

Idaho’s individual income tax is currently 8 brackets ranging from 1.6% to 7.8%, and its corporate income tax is a flat 7.6%.

More on Idaho here.