The big issue for this legislative session in Idaho will be spending even more of our money. Governor Otter and Republican Senator John McGee (Caldwell) are spearheading a massive tax increase that will be focused on our car registration fees. As detailed in the Spokesman-Review (Betsy Russell, 1/8/2008, Spokesman-Review story link), the fee increase could result in a doubling of the amount we currently pay to register our cars. The money would supposedly go to fix and build roads, which of course is a noble purpose (the Government almost always has a good reason to spend our money), but the argument that our current registration fees are very low avoids a couple key points.
1. There are 41 other states (including D.C.) that have income taxes and rate systems that are comparable to Idaho's system. Idaho has the 9th highest income tax rate of those 41 states. Seven states do not have an income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.) Two states limit income tax to interest income and dividends (New Hampshire and Tennessee). One state taxes a portion of your federal income tax liability (Rhode Island). Idaho has a high income tax rate.
2. Idaho has the 12th highest sales tax rate in the country. Five states do not have a sales tax, including Alaska, Delaware, Montana, New Hampshire, and Oregon.
3. Idaho has the 2nd highest sales tax rate on food in the entire country. Only 15 states tax food, and only Tennessee is higher than Idaho (7% v. 6%).
4. Idaho also has the 2nd highest sales tax in the country on nonprescription drugs, with only Tennessee being higher (7% v. 6%). Only 14 states tax nonprescription drugs.
5. Idaho has the 11th highest gas tax in the country, at 25 cents per gallon. Idaho's gas tax rate is 14.9% above the average.
6. Idaho has the 16th highest diesel tax in the country, at 25 cents per gallon. Idaho's diesel tax rate is 12.15% above the average.
7. Idaho has the 20th highest gasohol tax in the country, at 22.5 cents per gallon. Idaho gasohol tax is 4.78% above the average.
8. Idaho has the 20th highest maximum corporate income tax rate in the country, at 7.6%. Not counting the states that do not impose a corporate income tax, Idaho's rate is 3.86% higher than the average. This is a generous ranking, though, because many of the states above Idaho have graduated corporate income tax rates. Among the states that impose a flat corporate income tax rate (which is Idaho's method), Idaho's corporate income tax rate ranks 13th highest in the country.
Source: Federation of Tax Administrators’ website, FTA Home Page.
The point here is that our Republican leaders think they have found a tax imposed by the state that is not as high as other states, and they are using that argument in an effort to convince people that we can and should pay more taxes, via increased car registration fees. Yet, Idaho's existing income, sales, and gas taxes are already very high. The Idaho Republicans apparently want all of our taxes to be high, which makes sense because with the way they spend money, they need us to pay high taxes.
The kicker, however, is that based on data that I’ve been able to find, Idaho’s vehicle registration fees for typical vehicles is not low. Data maintained by the United States Department of Transportation Federal Highway Administration shows Idaho, in 2001, was in 24th place in terms of fees for a typical vehicle. (Summary of State Motor-Vehicle Registration Fee Schedules, Table MV-103 - Highway Taxes and Fees 2001 .) Idaho’s rates were 17.02% below the average in 2001, but 27 states were lower. A couple states (Minnesota and Oklahoma) had exorbitant fees. If you take out the top five and bottom five states, Idaho’s fees are close to average. Idaho's car registration fees are not low; at best they are in the middle tier of states, close to average.
Idaho's leaders are being disingenuous. The argument about whether to pay more car registration fees needs to be conducted in an honest environment, an environment that includes three overarching truths: (1) Idahoans already pay high taxes overall; (2) Idaho's government has grown considerably over the past decade, showing no restraint whatsoever unless forced by outside events (e.g., the Internet bubble and 9-11); and (3) our roads may indeed have been neglected in favor of other spending by the government. However, through it all, since 1995, Idaho has been ruled by the Republican Party, so whatever problems we have today are entirely of their creation.
I believe, as a fiscal conservative, that before we begin talking about raising more taxes and spending more money, our leaders, who are almost uniformly self-proclaimed conservatives, should be cutting all government spending; spending an entire legislative session thoroughly going through the state budget and eliminating all spending that is not absolutely necessary. We must stop this crazy ride we have been on for more than a decade!
1. There are 41 other states (including D.C.) that have income taxes and rate systems that are comparable to Idaho's system. Idaho has the 9th highest income tax rate of those 41 states. Seven states do not have an income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.) Two states limit income tax to interest income and dividends (New Hampshire and Tennessee). One state taxes a portion of your federal income tax liability (Rhode Island). Idaho has a high income tax rate.
2. Idaho has the 12th highest sales tax rate in the country. Five states do not have a sales tax, including Alaska, Delaware, Montana, New Hampshire, and Oregon.
3. Idaho has the 2nd highest sales tax rate on food in the entire country. Only 15 states tax food, and only Tennessee is higher than Idaho (7% v. 6%).
4. Idaho also has the 2nd highest sales tax in the country on nonprescription drugs, with only Tennessee being higher (7% v. 6%). Only 14 states tax nonprescription drugs.
5. Idaho has the 11th highest gas tax in the country, at 25 cents per gallon. Idaho's gas tax rate is 14.9% above the average.
6. Idaho has the 16th highest diesel tax in the country, at 25 cents per gallon. Idaho's diesel tax rate is 12.15% above the average.
7. Idaho has the 20th highest gasohol tax in the country, at 22.5 cents per gallon. Idaho gasohol tax is 4.78% above the average.
8. Idaho has the 20th highest maximum corporate income tax rate in the country, at 7.6%. Not counting the states that do not impose a corporate income tax, Idaho's rate is 3.86% higher than the average. This is a generous ranking, though, because many of the states above Idaho have graduated corporate income tax rates. Among the states that impose a flat corporate income tax rate (which is Idaho's method), Idaho's corporate income tax rate ranks 13th highest in the country.
Source: Federation of Tax Administrators’ website, FTA Home Page.
The point here is that our Republican leaders think they have found a tax imposed by the state that is not as high as other states, and they are using that argument in an effort to convince people that we can and should pay more taxes, via increased car registration fees. Yet, Idaho's existing income, sales, and gas taxes are already very high. The Idaho Republicans apparently want all of our taxes to be high, which makes sense because with the way they spend money, they need us to pay high taxes.
The kicker, however, is that based on data that I’ve been able to find, Idaho’s vehicle registration fees for typical vehicles is not low. Data maintained by the United States Department of Transportation Federal Highway Administration shows Idaho, in 2001, was in 24th place in terms of fees for a typical vehicle. (Summary of State Motor-Vehicle Registration Fee Schedules, Table MV-103 - Highway Taxes and Fees 2001 .) Idaho’s rates were 17.02% below the average in 2001, but 27 states were lower. A couple states (Minnesota and Oklahoma) had exorbitant fees. If you take out the top five and bottom five states, Idaho’s fees are close to average. Idaho's car registration fees are not low; at best they are in the middle tier of states, close to average.
Idaho's leaders are being disingenuous. The argument about whether to pay more car registration fees needs to be conducted in an honest environment, an environment that includes three overarching truths: (1) Idahoans already pay high taxes overall; (2) Idaho's government has grown considerably over the past decade, showing no restraint whatsoever unless forced by outside events (e.g., the Internet bubble and 9-11); and (3) our roads may indeed have been neglected in favor of other spending by the government. However, through it all, since 1995, Idaho has been ruled by the Republican Party, so whatever problems we have today are entirely of their creation.
I believe, as a fiscal conservative, that before we begin talking about raising more taxes and spending more money, our leaders, who are almost uniformly self-proclaimed conservatives, should be cutting all government spending; spending an entire legislative session thoroughly going through the state budget and eliminating all spending that is not absolutely necessary. We must stop this crazy ride we have been on for more than a decade!
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