The overwhelming 62-7 vote yesterday by the Idaho House to increase the annual grocery tax credit from $20 to $50 for most Idahoans and to $70 from $35 for senior citizens was not an exercise in equity or fairness. It was the easy way to postpone the politically tougher but more realistic decision to abolish the tax altogether as a means of simple justice.
The fact is, the grocery tax is a proportionately heavier, unfair burden on low-income families for whom food is not a luxury, but a necessity. Many of these families earn too little income to even claim a tax credit because they pay no income tax.
Does this need explaining? An unskilled laborer spending $100 on groceries, to construct a theoretical example, is taxed the same as the bank CEO who spends $100 on groceries.
Any notion that ending the grocery tax would toss the state's budget into disarray is nonsense. A revenue-neutral—and fair—increase in the income tax could offset the loss of sales taxes on food.
Idaho is swimming against the national tide. The trend is for states to abandon the grocery tax as a significant source of revenue. Consumers are spending more as a percentage on items other than food.
The Washington-based Center on Budget Policy and Priorities reports Idaho is only one of five states with credits for the grocery tax. Five states charge no sales on anything including food while 30 states don't tax food bought for home consumption. Seven states impose a reduced tax on some groceries. Only three states charge a full tax without credits.
The food tax looks even more egregious when compared to exemptions in the state tax code for other sectors of society.
Lawmakers will have a chance to demonstrate a better sense of justice by approving legislation proposed by Rep. Wendy Jaquet, D-Ketchum. Jaquet is offering a bill that would for the first time require the sales prices of real property to be reported to county tax assessors. If enacted, the measure would guarantee more accurate and fairer assessments in a system that now relies on guesswork and estimates and thereby skews taxes.
If the Idaho Association of Realtors uses muscle on legislators as it has in the past, a fairer property assessment system based on known sales prices will be doomed.
How fair can a system be that imposes a grocery tax on those who least can afford it but willingly handcuffs tax assessors from accurately valuing real property based on known sales prices?
Lawmakers need to restore integrity to both kinds of taxes or lose the trust of all Idahoans who believe in a fair shake.
