Top 20% of Idaho Earners Receive Tax Breaks, Bottom 80% Face Tax Hikes
An aggressive tax bill passed an Idaho House panel recently that would enact changes for all Idahoans. Changes would be made to income tax, grocery tax, grocery tax credit, sales tax, and gas & diesel taxes.
The nonprofit Idaho Center for Fiscal Policy analyzed the practical implications of this bill and found that, overall, those making less than $93,800 (about 80% of Idahoans) would face tax increases. Those making more than $93,800 (about 20% of Idahoans) would receive tax breaks.
Those earning more than $427,400 (about 1% of Idahoans) would receive the greatest tax break, at $4,957. This is due to Idahoans in the top income tax bracket seeing their tax rate drop from 7.4% to 6.7%.
Key highlights of the analysis include:
- Replacement of Idaho’s graduated income tax rate with a flat rate of 6.7% on all income for earners at or above $5,861 in taxable income.
- Repeal of the grocery tax credit and the elimination of the sales tax on food.
- An increase in the gas and diesel tax from 7 cents a gallon to 32 cents.
Here is the full analysis by the Idaho Center for Tax Policy.