Recently the Mountain States Policy Center wrote an article comparing Idaho’s flat tax rate with other state’s flat tax rate. Interesting to note that Idaho’s flat tax rate is the highest of all of the other states. While this is concerning, it doesn’t take into account all of the other taxes, or to be more accurate the total tax burden.
According to the Tax Foundation, which is the source for the Mountain States Policy Center’s article, Idaho is rated number nine for total tax burden.
In fact, none of the states that are listed as having lower flat rate income taxes have a lower total tax burden than Idaho.
Idaho’s Total Tax Burden vs. Flat Tax Rates
The ultimate question that the voters of Idaho need to answer is, what is an acceptable tax burden? If the tax burden is to go lower, what government services should be cut or reduced? If you believe that the tax burden needs to be higher, you are going to have to justify the additional government spending that would require a higher tax burden.
Tax Migration: The Hidden Driver of Idaho’s Housing Affordability Crisis
Beyond tax rates, Idaho’s economy is dealing with an unprecedented influx of income. According to internal IRS tax migration data, between 2014 and 2023, over $11 billion in net taxable income moved into Idaho.
“Net taxable income” means the total incoming income minus the income of residents who moved out of the state.
Importantly, this $11 billion figure only tracks recurring taxable income. It does not include the massive cash reserves newcomers bring with them from liquidating high-value real estate in states like California, Washington, and Oregon.
If you are wondering why Idaho has an affordability issue, especially when it comes to housing, here is your chart:
Finding the Right Fiscal Balance for Idaho’s Future
The bottom line is that the voters of Idaho need to decide what makes best financial sense. Income Taxes, Sales Taxes and Property Taxes all fund different parts of the government. Property Taxes primarily fund local government and that means we must be very careful when proposing changes to property taxes. If we are to eliminate them, then we must be willing to come up with other ways to fund local government.
Think before you vote. Ask questions. Do your own research.
