Small business expecting to see the return of some familiar bills helpful and harmful
The 2018 General Session of the Idaho Legislature commences January 8 with some immediate work for NFIB/Idaho.
Boosting the Personal Property Tax Exemption
Idaho taxes both real property (land and buildings) and personal property used for business purposes (machinery, equipment, furniture, etc.). Currently, the first $100,000 in personal property value is exempt from taxation. NFIB will continue its fight to completely eliminate the tax and if it can’t, to boost the exemption rate to as high as it will go. The personal property tax is:
- difficult to administer for government
- difficult to comply with for small-business employers, not having the legal and accounting departments big businesses have
- unevenly applied from county to county, having as Idaho does, 1,105 taxing districts
- not a huge revenue source, accounting for just 10 percent of all property tax revenue in the state and a minuscule 3 percent of total state revenues
Called a Tangible Personal Property Tax (TPP) in some states, a levy like the personal property tax “imposes significant economic distortions,” according to the nonpartisan Tax Foundation in its background paper, States Moving Away From Taxes on Tangible Property.
“States and local governments seeking to reduce economic distortions and improve competitiveness through the tax code should reduce (or eliminate) TPP taxation,” advises the Tax Foundation.
Fighting All Efforts to Extend the Sales Tax to Labor and Services
Big government champions are relentless in seeking to expand Idaho’s sales tax to fund their priorities and programs, regardless of their cost and effectiveness. Just as relentless have been NFIB’s Idaho members in their opposition to expanding the sales tax to include labor and services. When asked to vote on their NFIB/Idaho Member Ballots in the past, small businesses have been adamant in saying ‘No’ by huge margins:
- 2006—89 percent
- 2007—93 percent
- 2010—83 percent
Opposing Attempts to Cut Entry-Level Wage Jobs
The minimum wage is an entry level wage earned mostly by teenagers and young adults still living at home. Increases in the minimum wage have only one major effect—eliminating entry-level jobs. Despite these facts, proponents of ever-increasing rates wrongly argue that they’re needed to lift people out of poverty, even though there is little to no evidence back it up.
Just 2.7 percent of the nation’s workers earn the minimum wage, according to the U.S. Bureau of Labor Statistics, and most of them “tend to be young. Although workers under age 25 represented only about one-fifth of hourly-paid workers, they made up about half of those paid the federal minimum wage or less. Among employed teenagers (ages 16 to 19) paid by the hour, about 10 percent earned the minimum wage or less, compared with about 2 percent of workers age 25 and older.”
In 2016, Idaho lawmakers took the wise step to prohibit by law local governments from establishing their own minimum-wage rates. Proponents of ever-higher minimum wages must concentrate their efforts on the state level, which NFIB is expecting they’ll do once more in 2018.
Defeating a Local Option Tax
This annual bid by local and county governments to give them the power to levy their own taxes has been defeated in the past, but every year brings a renewed try to see if lawmakers will finally bend. NFIB’s Idaho members have been adamantly opposed to local-option tax authority in past state ballots, voting ‘No’ in:
- 2005—67 percent
- 2008—84 percent
- 2012—78 percent
Stopping Paid Leave Proposals
The good news is that that vast majority of businesses already offer paid or unpaid time off for a variety of reasons, sickness, care for a family member, victim of domestic violence (see infographic here).
As NFIB has pointed out, “Small businesses know their employees on a more personal level, and most offer paid time off on a case-by-case basis, providing the employee what he or she needs in a way the business can afford. Mandatory paid leave would only impose unnecessary limitations on these businesses. Such initiatives assume one size fits all. But particularly in the small business world, what works in one company could be detrimental for the next. The rigid nature of these programs often has a negative impact on employee morale.”
For more information on how devastating paid leave proposals could be, the Research Foundation of NFIB took a detailed look at a federal proposal, using sophisticated BSIM modeling (Business Size Insight Module).