Senate Passes $35M Tax Cut Bill, Ends Session

The 2012 legislative session is now over, but before adjourning Thursday night, the Senate voted to extend $35 million in tax cuts to Idaho individuals and businesses, lowering tax rates to 7.4 percent.

Families of four that make $100,000 will see an extra $71 in their pockets annually.

“Frankly, it’s not a lot of money,” said Pocatello Chamber of Commerce President Matt Hunter.

Despite that, Hunter said the bill is more of an incentive for out-of-state businesses to come to Idaho. The bill was one of the biggest initiatives of the Chamber Alliance this year.

“What it really sends is a message that while other states around us are raising their taxes, their corporate taxes, their personal taxes, Idaho is at least keeping them level and lowering them a little bit,” Hunter said.

The bill gained momentum when it passed the Senate Tax Committee Thursday afternoon. Opponents of the bill say it hurts the middle class to help those in the higher tax bracket.

“What this plan is asking me to do is to take money from my constituents and redistribute it to the wealthy,” said Sen. Elliot Werk (D-Boise).

Republican senators admit the bill is not perfect.

“This may not help very many people, not going to help everybody who needs a job, but going to help some of the people who need a job,” said Sen. Jim Rice (R-Caldwell).

There were compromises with passing funding for teacher pay and putting money into rainy day funds, Hunter said.

“I think it gives people hope, and that’s something we’re really looking for,” he said.

Some critics also said the state should have put that money to work by re-staffing state jobs that have been cut.

The bill will reduce individual and corporate tax rates to 7.4 percent.