- Associated Press - Saturday, October 31, 2015

BOISE, Idaho (AP) - Three Idaho economists say slashing the state’s income tax rates will not help boost economic growth.

The economists’ conclusions follow efforts by a legislative working committee contemplating tax reform suggestions for the 2016 Idaho Legislature. One idea that has emerged is gradually cutting the income tax rate, the Spokesman-Review (https://bit.ly/1Pas3Xw) reported.

University of Idaho economic professor Eric Stuen says there is no consensus that tax cuts improve economic development in the long run. However, he added that tax cuts can dramatically change government fiscal frameworks and budget deficits.

Stuen also said that fewer tax exceptions and loopholes would help ensure a transparent tax system.

Meanwhile, Idaho State University economist C. Scott Benson criticized the income tax cuts taken in 2012 and 2001. He says that a state can’t have a thriving economy while starving the government.

Three years ago, lawmakers cut the top individual income tax rate from 7.8 to 7.4 percent. Corporate taxes dropped from 7.6 to 7.4 percent. Before that, lawmakers were in Boise for the longest-ever legislative session of 118 days in 2003 following a permanent cut to income tax rates two years prior.

“For a thriving economy, in a lot of ways you need hope,” Benson said, adding “that’s not an economic term. You have to have some reasonable expectation that the future is going to create more opportunity than we have now.”

According to the Idaho Tax Commission, the state ranks 49th among the 50 states and the District of Columbia on overall per-capita tax burden

The Legislature’s Tax Working Group, which includes six senators and six representatives and is chaired by the House and Senate tax chairmen, will meet Tuesday.


Information from: The Spokesman-Review, https://www.spokesman.com

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