Tuesday, August 22, 2006

Science and technology

This Friday, Gov. Jim Risch will try and pass his special interest tax shift during an expensive special session of the Idaho Legislature.

The tax shift would essential give an 18% tax break for all property owners, while at the same time raising the sales tax by 1 percentage point or 20%. This means big businesses get a break, and homeowners get the shaft.

This disturbs me on so many levels.

In Idaho, as in many other states, property tax goes to pay for education. So, under this new tax plan, financing education in Idaho would put a greater demand on sales tax.

Idaho has some of the lowest tax burden in the U.S.
Idaho has some of the lowest paying jobs in the U.S.
Idaho is one of the worst educated states in the U.S.
Idaho's tech industry is almost non-existent with the exception of Idaho National Laboratories, Micron and HP.
There are 140+ employees in Idaho government who work to assist agriculture based business. There is 1 employee dedicated to promoting science and technology.

Why do I bring all of this up? I mention these things because we should be paying more into education in Idaho! Instead, we tout our beautiful state as the state where businesses can come to use up our water, air, and land, but pay the lowest taxes. Not only that, but they don't have to pay their employees worth squat either.

Even with our ridiculously low tax burden, we still don't attract high tech industries because we don't generate a populace smart enough to work in those industries.

Under the proposed Democratic tax plan, which Gov. Risch refuses to consider, only homeowners would receive a property tax break. Under the Democratic plan, homeowners would see a larger break than under the Republican plan. Under the Democratic plan, school funding would be secure.


Lauren Bingham said...

Okay, Pete, you're on the right track, but here are the holes I can see in your argument:
(and now it's time for breakdown--name that song!)

- Recalling what I've learned from my zero economics classes and my many government classes, a sales tax hike hurts the poor (and to a lesser degree, tourists) not big business. Big, rich business tycoons could care less about paying an extra $10 on a week's worth of groceries, but it hits hard for the poor. And again, the poor, who typically rent, not own, get screwed on the property tax break. So, again, sucks to be a poor working stiff.

- Alright, I lied. It's the poor and the children enrolled in public education that suffer because of the property tax break (the property tax suppliments the education budget). However, schools like Madison M.S. located in urban/high property value areas will feel the love (at least temporarily).

- Idaho has some of the lowest paying jobs because it has one of the lowest costs of living. For example, I rent a 650 sq. foot, one bedroom apartment in north Austin and pay $550/mo (and the place is no castle; built in 1990). A brand new, much larger 2 bedroom apartment in Rexburg will go for $500/mo. And if the low cost of living isn't behind the low pay rate, maybe it's because employees in Pocatello aren't as qualified as employees in LA (not always the case).

- Idaho's tech industry sucks because no one wants to live there! Period! Again, I live in Austin (home to Dell, Texas Instruments, AMD, Freescale, IBM, Samsung, etc.)...in fact I now work for a PR firm that deals mostly with high tech clients. That being said, tech industries thrive in big cities, where they have access to major universitites, research firms, a significant buyer base, major publications, law and advertising firms to represent them, opportunitites to hold conferences with other tech people, etc. I think the ONLY reason tech companies would agree to move to Idaho is its cheap land. But seriously, it would never happen. Not in a zillion years.
(no offense Idaho)

Peter Nguyen said...


You bring up great points.

I don't think I said or implied that sales tax hurt business. If I did, I certainly didn't mean to.

Actually, my point is this: primary homeowners are the ones who are really being hurt by property tax right now. Yet, Gov. Risch decided to give a property tax cut to EVERYBODY, but also RAISE the sales tax. Businesses do not pay sales tax. Regular Idahoans do.

According to the Idaho Center on Budget and Tax Policy, a non-partisan group, unless a tax payer makes more than 135,000 dollars a year, they will end up paying more in sales tax than they receive in Gov. Risch's property tax cut.

According to the Idaho Department of Commerce and Labor, in 2005 the average Idahoan made $33,000.