Democrats 
Letters To The Editor
Published in Spokesman Review T he Republican tax plan, sponsored by the Idaho
Association of Commerce and Industry (IACI), would mean more total taxes for
most Idahoans. There would be a huge tax shift with a higher sales tax to cut
taxes for large property-owning corporations that need no relief. The plan, which Gov. Jim Risch wants the Idaho Legislature to pass when it
meets in special session on Friday, does nothing to remedy the basic property
tax problem, continued inflation in the taxable value of homes.
With IACI's tax plan: ■ Homeowners get no net tax relief. State Tax Commission figures
show $105 million in added sales tax and $104 million in property tax savings. ■ Property tax savings for homes would be temporary. With no further
adjustment in the homeowner exemption, the savings would be lost to further
increases in taxable value in a year or two. The sales tax increase would
continue. ■ Renters would lose, paying more sales tax with no equal reduction
in rents. ■ Many businesses would lose, paying more business-related sales tax
than their property tax savings. This applies particularly to businesses that
lease space or are home-based. ■ Local control of schools would be reduced. In promoting its plan, IACI relies on a big lie. It is telling legislators
that the modest $25,000 update in the limit on the homeowner exemption approved
in the regular legislative session will shift $47 million in taxes to
nonresidential property in 2006. Such a shift could happen only if there was no inflation in the taxable
value of homes and no new residential construction. Evidence that there is no such shift is provided by current State Tax
Commission estimates of total taxable value and property taxes by category for
2006, with and without school levy replacement. Those figures show no net reduction in the total taxable value of
owner-occupied homes and no resulting increase in levies that would shift taxes
to nonresidential property. The figures show just the opposite, a further shift to residential
property in 2006. Even with the update in the exemption, there is a projected
$5.4 billion net increase in the taxable value of homes. With nonowner- occupied
residential property, the total projected increase in residential taxable value
is $13 billion. With this huge increase, the commission projects a reduction in average
levies. Such reductions would result in more than $40 million in property tax
savings for commercial, utility, timber, mining and farm property in 2006 –
without the proposed levy replacement. IACI also ignores the fact that there was a huge tax shift to homes in
recent years. Nonresidential property paid less because homes were paying more. ■ From 2000 to 2005 residential taxes increased four times as fast
as total taxes on nonresidential property, 54 percent compared to 13 percent. ■ Residential property accounted for 57 percent of the total taxable
value of Idaho property in 2000 but paid 84 percent of the five-year increase in
property taxes. ■ In the last two years residential taxes increased nine times as
much as nonresidential taxes, $143 million versus $15 million. ■ Inflation in the taxable value of commercial property averaged
only 1 percent a year from 1995 to 2005. While most Idahoans would lose with this plan, companies represented by
IACI's officers and directors would gain. Those include Idaho Power, Avista,
Intermountain Gas, Qwest, Simplot, Micron, Monsanto, Potlatch, Washington Group
International, Albertsons, Hewlett Packard, Union Pacific, US Bank and Wells
Fargo.
Tax Plan Offers No Relief For Homeowners
by Ken Robison
August 24, 2006
More tax relief could be given to homeowners by further increasing or
eliminating the $75,000 upper limit on the homeowner exemption. Or by replacing
the $3 per $1,000 basic school levy only for homes, using state surplus revenue.
No sales tax increase is required for either of those remedies.
Suggestions and submissions for this page may be sent to:
Web Master
Home.