group_by_banner_kim_defrancoI run in political circles.  Among those circles are liberals, moderates and like-minded conservatives.  On virtually every issue I can have a civil and straight-faced discussion with those who believe differently. Yet, one some issues I cannot maintain a straight face or have an honest discussion.  Among conservatives, the primary issue is ideological purity.  See my article on Labrador’s vote for Boehner here.  Among liberals and some moderates it is on taxation.  More specifically, the what I like to call the “Tax the wealthy in Idaho more crowd.”

I have a tough time discussing such a policy precisely because it lacks any knowledge of policy and Idaho’s tax brackets.  Idaho has an extremely old and regressive tax system.  Did you know Idaho’s top tax bracket for an individual is $21K and $42K for a couple.  The top tax bracket for Idaho was formerly 7.6% but is now 7.4%.  Most recently, the Governor proposing dropping the highest tax bracket to 6.9% over five years which equals a .1% cut every year.

Cuts like this would impact the majority of Idahoans.  Indeed, the Census found Idaho’s median income between $40K and $50K meaning many individuals and couples are paying in the highest tax bracket.  So, should we deem them wealthy?  Should we force an individual earning $21K in Idaho pay more?  According to the federal tax code these individuals are in the lowest tax bracket.

Therein lies the rub that many in the tax more crowd don’t get.  The majority of Idahoans are deemed “wealthy” according to Idaho’s tax code.  Taxing the wealthy is actually a regressive action.  Considering the idea is only proposed by liberals and their banner carried by Democrats in the legislature who claim to care about the poor it is ironic a party that claims to care about the poor would want to tax them and the lower middle class (if $21K can be called that) more.  In fact, it is not hard to make a case for a .5% tax cut for individuals earning $21K to actually be helping the poor or lower middle class.

But I try to be beneficial in such a discussion and give them the benefit of the doubt.  Surely they comprehend these facts.  Sadly not.  Nor do they understand that even if we agree that $21 or $42K is not rich and a new bracket needs to be created it would be a logistical and political nightmare.  Exactly how many Idahoans would line up behind a new tax on $30K, $40K, etc.?  Yah, I thought so.  Exactly as many that are in the tax more crowd.

But, let’s put even that aside for the moment. Consider there may be many millionaires and billionaires in the nation only a few are in Idaho.  Even if set a tax bracket up just for them they could not make up the funding shortfalls the tax more crowd sees.  Taxing what millionaires and billionaires there are here would not fund our infrastructure shortfalls nor education needs.

There are not many other palatable taxing options.  Higher taxes on businesses would discourage investment, not encourage it.  A higher sales tax, though the most fair due to being a consumption tax, is extremely regressive.  Everybody has to eat and we tax groceries.  As an aside, I can see eliminating sales taxes on groceries as being a bipartisan issue both conservatives and liberals could get behind.  Minus the tax more crowd of course.

Ultimately, the tax more crowd is going nowhere.  I am thankful for this.  But the core of their arguments lack context, policy depth and basic knowledge of their state.  It’s hard to have honest discussions with people when they know nothing about the topic they are discussing.

 

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