20% Sales Tax Increase

We have been trying to wrap our brain around the property tax relief Gov. Jim Risch bullied through the legislature. We think the law of unintended consequences may come into play since nobody had a plan that could be understood or endorsed without reservation.

The shift from property tax to sales tax may not be good news to retailers and consumers, but big business and homeowners will get SOME tax relief. If the GUARDIAN got the decimal in the right place we figure the owner of a $200,000 house with a homeowners exemption will see a tax savings of about $425. On the downside the INCREASED sales tax on a $25,000 car will be $250.

The “proposition one” slated for the November ballot to raise sales tax another 1 percent for schools is probably doomed. Supreme Court of Idaho has pretty much given the legislators free rein to repeal ANY law passed by citizens anyway.

The increase in sales tax could prompt consumers to head west to Oregon for high end purchases. A $1,000 bill spent in Oregon means you save $60 in Idaho sales tax. Technically you aren’t supposed to do that, but you are also supposed to tell the Idaho Tax folks you bought your new GPS on the internet and saved 6% taxes over the Cabela’s store price.

That may be unlikely given the “NEWS” reports print and broadcast media devoted to new store openings like Costco and Cabela’s. You’d think Krispy Kreme had come to town! The daily paper’s outdoor team will have a rough time being taken seriously in the future after turning tricks at Cabela’s.

With a softening of the housing market we could see an end to increased values–and taxes. The speculation continues forever, so let’s hear from some “experts.”

Comments & Discussion

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  1. Well, heck, I’m an expert at everything (just like ‘most everybody else), so here goes:

    First, were I the the Legislature, I would have voted against the bill no matter how good it was, just because of our temporary emperor’s arrogance in insisting that only *his* bill could even be considered.

    Second, the whole purpose of the proposed tax reform — to keep people from being forced out of there home by huge annual tax increases — is diluted to the point of being meaningless by giving the tax cut to businesses and all other property owners.

    Third: The wimpy legislators who voted in favor of the bill not because they thought it was a good one, but because their master told them to should be run out of town on a rail (and, yes, tar and feathers first if we have enough).

    Fourth, a former Idaho Supreme Court justice has said that (as many of us suspected) King James did not have the authority to tell the legislative slaves that they could consider only his bill; rather, he could limit them only to one topic, but not to one bill.

    Fifth: I don’t know how much that session cost us (Note to the B.G.: Can you find out?) but it’s one more thing to waste our taxes on. OK, five is enough.

    Next expert?

  2. Question?? Has the increase in fuel/gasoline prices also resulted in an increase in state tax revenue from this price increase? Or is the tax a per gallon tax?

    EDITOR NOTE–GUARDIAN had the same question earlier. We were told by tax commission guy the gas tax is per gallon and is not part of sales tax.

  3. BG, it is not hard to understand. Big business wins again. We are so backward here in Idaho that most of the politicians and most of the voters believe in that “trickle down” nonsense that was so soundly disproven during and after the Ronald Ray-guns administration.

    My 2006 property taxes (current year’s estimated taxes on my assessment notice) on the home I live in went down 13.9% from 2005 when they increased the homeowners exemption from 50,000 to 75,000 earlier this year. I expect they will go down further with this new gimmick, but it is still a massive tax shift from those who can afford it to those who can’t. The sales tax is regressive. Repeal it.

    And BG, why did we hear nothing from Team Dave and the City Council or Ada County Comissioners? Didn’t they have an opinion? Can they possibly be that cowardly?

  4. One good thing that this does is remove the only item that has no cap on it from our property tax. Why are the schools the only uncapped expense on the property tax? The easiest way for the tax problem to be fixed would be a cap on assessment at 2% for homeowner occupied property and reassessment (increases) only when property changes owners. If something like that takes a constitution change , then so be it. With this new bill at least every item on your property tax bill has 3% caps on budgets.

  5. Well what can one say? This state just keeps voting in Rebulican’s that are controled by the big money in this state. Just watch good old Butch he’ll run away with the Govenor’s seat.
    Wouldn’t it be funny if people came out to vote and acually ousted these bunch of crooks.

  6. I see the future and it sounds like sheep in the voting booths.

  7. Mo–
    Is that your “two sense worth?”

  8. Does anyone think that before this tax “break” can go into effect, a lawsuit and injunction will be filed nullifying the legislation? I was puzzled that the AG didn’t opine on the legality of the issue Huntley addressed. I guess it would be a well orchestrated way to do nothing, while appearing to do everything?! Risch seems a master of this technique.

  9. The reason Team Dave and the City Council is silent is that they are too busy spending all the increased tax revenue they have been getting.

    And making deals to get around the voters on convention centers, selling the library to developers and fixing rotten row house laws.

  10. Tam, I think there will be little chance for an injunction. There must be a showing of irreparable damage that resulted in the alledgedly extraconstitutional conduct. The party asking for the injunction would also have to show the likelihood of success on the merits. Since the bill passed by two thirds majority of both houses and the only other proposal was sponsored by the numerically inferior Democrats, I’m a thinkin’ they wouldn’t be able to meet the standard to get an injuction, even a preliminary one. Also the Courts are loathe to embark into areas deemed “political”. The fix was in, and the fight now will be in November.

  11. Gordon pretty much hits every criticism I have of this thoroughly crap legislation. It’s just a tax shift, not a break, and another hit on education from the Republicans. An un-elected governor just railroaded a poorly-considered bill through a cowed legislature controlled by a party that acts just as craven and unthinkingly as the Communist party in its heyday (what the party bosses say, goes) and the consequences of this will undermine and haunt us for a long time to come. The token “approval” vote we’ll get in November is yet another worthless sop thrown to the voters to make them think they actually have any say whatsoever in the process.

    I keep hoping that this time will be the time their arrogance gets the better of them and the voters thoroughly purge their butts out of the Statehouse, but I hope that every year when they pull yet another stupid stunt or pass yet another big-business friendly little-guy hostile piece of legislation, and look what keeps happening.

    Kudos to the heroic Democrats who had a better plan and fought the good fight all the way down to the bitter end. They had brass and courage and, as far as I’m concerned, better embody the true Idaho value of fearless independence than the spineless Republicans who allowed King Risch to take their manhood firmly in hand and squeeze. For once I’m damn proud to be an Ada County constituent. All you conservatives who think your straight “R” voting record represents some kind of “true Idaho” can truly and thoroughly shove it. (And hats off to the few Repubs. who stood their ground.)

    Which reminds me– when the meagre property tax break you get from this is completely offset by the increased sales tax, along with the ever-rising cost of living, and you poor- and middle-class folks find your finances in ever more dire straits, but you still vote Republican because you care more about preventing the gays from marrying and the innocent fetuses from dying than your own economic well-being– don’t you dare make your way down to Boise city looking for help and aid. You got what you damn well deserved. Heartless? Yeah, but someone keeps voting these damnable idiots into office. They, and the rest of us, alas, will reap what they sowed.

  12. Mr L. – no, just 1 cent – to equal the sales tax increase. I am saving the other cent in case there is something else I want to say.

    Voter – team dave has nothing to do with this. Boise is not Idaho, so that means that Dave is not the gov, just the mayor of one city in the state. I hope that helps you understand that Dave could not stop the sales tax increase. He is just a mayor.
    (and that is not a part of my one remaining cent.)

  13. Come on mojo spend the other 1 cent.

    EDITOR NOTE–I think it was a mixed metaphor joke..”2 senses” as in SEE the future and it SOUNDS.

  14. Unfortunately, the savings from buying tax free goods in Oregon is eaten up by the gas you use to get there unless you live in a border town. Oregon border towns probably supported the tax shift since they all shop at the Oregon stores anyway. Think Weiser/Payette. It is a great deal for them. I cherish my tax free vegetables and bartered organic meat. Every fresh bite sticks it to the man.

    Ride a bike whenever you can, and stick it to the man. Brown bag your lunch, stick it to the man. Trade and barter, go to yard sales, stick it to the man. Turn off a light/computer, stick it to the man.

    I wonder where was small business on this issue? This will effect their livelyhoods? Silent.
    Idaho restaurants? Silent.

    Idaho is made up of a silent majority that doesn’t mind a Musolini like dictator at the helm, protecting them from abortions, stem cell research, the environment, and jack booted thugs trying to take their guns. Where are those black helecopters when we need them?

  15. john – right on!

  16. Other than 275.00 a month in food and a new lawnmower, we haven’t purchased anything “new” in the last year or more. Yard sales, second hand stores, ebay, etc. have provided for every need and most of the niceties. It isn’t even difficult to do. We garden, we barter for haircuts, we can our own vegetables and trade with others who grow stuff we don’t. I glean other fruit (today I gleaned peaches) that we don’t grow. I’m not really the “granoly” type, or that’s what people tell me…but this is working for my family and working reall well. I’m with John-I HIGHLY recommend it.

  17. junkyard dog
    Aug 30, 2006, 8:58 am

    The sales tax increase doesn’t faze me one bit since it’s consumer driven and totally within our control. People simply don’t need to buy all the crap they do…it makes me ill to see such waste when we’ve got 50,000 people living in poverty in the Treasure Valley, but I digress.

    You can save $1500 in sales tax by NOT buying a $25,000 car every year, and $12 in sales tax by using Grandpa’s old compass instead of buying a GPS at Cabela’s. John and Tam both posted examples of other ways in which people can save hundreds of dollars a year in sales tax. “Use it up, wear it out, make do or do without”.

    Property tax however is different, it can’t be reduced through wise spending (you don’t get a discount if your kids are grown, if you don’t call the fire dept, etc.) Some folks who bought modest homes and paid them off early are now being forced to sell off adjacent lots (for infill) so they can afford to keep their homes. Other senior citizens are having to sell their homes altogether.

    I’ve seen families move to Kuna because they can’t afford the taxes on the starter home they bought 15 years ago. I know another guy who went back to being a renter because it was cheaper than paying property tax. I’ve seen the property taxes on our home increase 500% in just an 8 year period and hate to think what it’s going to be when we retire.

    If tax revenue can come from other sources, terrific. People who can afford to buy new cars every year and specialty clothes & gear from specialty stores can afford the 1% increase. Senior citizens and the working stiffs who don’t have that luxury should be guaranteed some security in knowing that they at least won’t be taxed out of the homes.

  18. Wow. Glad to know I’m not alone in the consumer driven world. See you guys at the garage sales.

  19. Junkyard got it right for discretionary spending. However, for a lot of people at the lower end of the economic spectrum, the word discretionary doesn’t mean much.

    A single mom, with a couple of kids, working the low wages Boise and Idaho are famous for, and living in an appartment, will not see any benefit to the increase in the homeowners exemption, but will see her spending power decrease by another percent that she can ill afford.

    Like all tax “reforms,” this one is really a tax shift. Sort of like rearanging room assignments at the Hotel California. No one gains unless some one else loses. In this case, as is so often the case, the ones who can afford it least will be the ones who get hit the hardest.

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