A new study shows the poorest Idahoans spend a larger share of their income on state and local taxes last year than wealthier residents did.
The study by the Institute on Taxation and Economic Policy, looked at expenditures on income, property, and sales/excise taxes, though it did not include federal taxes. It found that the lowest-earning 20 percent of Idahoans, making less than $20,400 per year, spent 9.2 percent of their family income on taxes in 2017. The highest-earning 20 percent, bringing in at least $88,200 per year, spent 7.5 percent on taxes.
Idaho has a progressive income tax structure, meaning higher earners pay at higher tax rates.
The study says state income taxes were the only tax category in which the wealthiest one-fifth of Idahoans spent a larger percentage of family income than lower-earning residents. On average, the top 20 percent spent 4 percent on personal income tax, and the wealthiest 1 percent spent 4.6 percent.
Idaho’s poorest 20 percent was in the negative, meaning they got some tax money back. Low-income Idahoans were hit hardest by property and sales taxes. The lowest-earning segment spent 3.3 percent of income on property tax and 6 percent of income on sales and excise, or “sin” taxes.
The wealthiest 20 percent of Idahoans spent relatively small portions of their incomes on property taxes at 1.6 percent, and sales/excise taxes, 1.7 percent.
Idaho lawmakers could help low-income people by eliminating taxes on groceries, and legislators expect the issue to resurface in the 2019 session. (Idaho Statesman)
