Written by: Jim Hansen
Friday, August 03, 2007

I have heard Judy Brown - Director of UVI's Idaho Center on Budget & Tax Policy - give presentations on values and tax policy many times and continue to be impressed with her analysis. She'll be posting her power-point presentation on UVI's website soon, but you should hear it live as well. She began by reminding legislators that "exemptions" mean a departure from the uniform application of tax law. Of course, most legislators know they have handed out exemptions to corporate lobbyists for years so the base is getting narrower and narrower.

Keith Allred later pointed out that tax exemptions assume that the market is not working and is not efficiently allocating resources. It was an free market critique of the same thing. Feigning support for the principles of markets but acting in ways that favor only the biggest players.

Judy then pointed out that legislators have an obligation to set criteria for ALL parts of tax law. The criteria is not new. Most people agree they should be obvious: 1) Revenue has to be reliable; 2) Taxation should be equitably shared among all people; 3) Compliance with tax rules should not be administratively burdensome; 4) Our state should be able to respond to interstate and international competition; 5) Tax breaks should be economically neutral; and 6) any tax breaks should be open and accountable.

Judy also pointed out that currently, Idaho puts a greater burden on low income families than on upper income families. Take all taxpayers and split them into five groups from poorest to richest. Those families in the lowest earning group pay 9.7% of their income on taxes. Those in the highest 1% pay 6.1% of their income in taxes.

 

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