Don't understand Idaho's high taxes (Coeur d'Alene: sales, credit, how much)

[gbioryl]

After taking several vacations to the Spokane, Coeur d'Alene areas I am wanting to move my family to the Inland NW. Upon doing my research I discovered to my dismay just how terrible super conservative Idaho is on taxes when compared to Washington.

Idaho is the most conservative state in the union according to the last presidential election, even more so than Texas, Arizona, and Utah. Idaho is one of the most free states when it comes to leaving the citizen alone. Yet Idaho has one of the highest tax burdens of any state, let alone a conservative one.

Idaho charges a sales tax on groceries and charges the highest of its seven income tax brackets at 7.4% at only $10,5000. Really? Ten grand? McDonald's employees working 30 hours a week making minimum wage make ten grand a year in Idaho (I checked).

The income in this bracket is higher than the highest rates of liberal states Connecticut (6.7% $250,000), Maryland (5.75% $250,000), Massachusetts (52.0%), Delaware (6.6% $60,000), and Rhode Island (5.99% $135,000).

In fact Idaho ranks just barely behind Washington with regards to tax burden. Washington has no income tax, but high sales and property taxes (except groceries). This causes the two states, diametrically opposed politically, to lie almost dead even when it comes to tax burden. How is this possible.

I will still choose Idaho over Washington in a heartbeat since the overall tax burden is the same but Idaho is more free. But understand my confusion when I will have to pay basically the same tax rate as the liberal nut state 30 miles to the west.

[KurtAngleDoesn'tSuck]

Exactly. You don't understand.
Most families receive a $100 per person grocery tax credit per year.
Idaho grocery credit - Idaho State Tax Commission
The tax on a single person's income of $10,718 is less than 3%.
Anything they make over and above that is taxed at 7.4%
Individual Income tax rate schedule - Idaho State Tax Commission

[Cnynrat]

The Idaho tax bite is indeed quite steep for higher income earners. It seems to be designed around a wage base that is quite low, so they need to tax those low-moderate income citizens at a pretty high rate to generate the income they need.

Some time ago there was a thread in this forum in which we talked about why the ratio of doctors to residents was so low in ID. A doctor chimed in and told is that a big reason was the tax rate, which is quite high compared to MT or WY which offer similar outdoor recreation opportunities to ID.

Dave

[ScottStielow]

Originally Posted by gbioryl

After taking several vacations to the Spokane, Coeur d'Alene areas I am wanting to move my family to the Inland NW. Upon doing my research I discovered to my dismay just how terrible super conservative Idaho is on taxes when compared to Washington.

Idaho is the most conservative state in the union according to the last presidential election, even more so than Texas, Arizona, and Utah. Idaho is one of the most free states when it comes to leaving the citizen alone. Yet Idaho has one of the highest tax burdens of any state, let alone a conservative one.

Idaho charges a sales tax on groceries and charges the highest of its seven income tax brackets at 7.4% at only $10,5000. Really? Ten grand? McDonald's employees working 30 hours a week making minimum wage make ten grand a year in Idaho (I checked).

The income in this bracket is higher than the highest rates of liberal states Connecticut (6.7% $250,000), Maryland (5.75% $250,000), Massachusetts (52.0%), Delaware (6.6% $60,000), and Rhode Island (5.99% $135,000).

In fact Idaho ranks just barely behind Washington with regards to tax burden. Washington has no income tax, but high sales and property taxes (except groceries). This causes the two states, diametrically opposed politically, to lie almost dead even when it comes to tax burden. How is this possible.

I will still choose Idaho over Washington in a heartbeat since the overall tax burden is the same but Idaho is more free. But understand my confusion when I will have to pay basically the same tax rate as the liberal nut state 30 miles to the west.

Also. Military retirement is taxed, until your reach age 65 than i believe you can get a waiver. Any other Federal retirement is also affected, not including RR Retirement, along with any 401k or TSP( similar to a 401 or a Roth) Savings programs.
I do not pay state taxes in Hawaii on my Military retirement. Its worse than Washington or Idaho on all other taxes.

[sunflowersinthegarden]

Another question: I'm curious why I have heard several times now that Idaho is great for small businesses. Do they get some extra tax break or write off?

[Sage of Sagle]

Perhaps it's in relation to the state from which you relocate...

Compared to California, the difference in state and county taxes and "fees" and regulatory "fees" and costs of compliance are over $10k per year in my pocket since relocating here.

[f5fstop]

For me, a Retiree, ID is better than the two previous states I lived in, UT and MI. And I believe more tax friendly than TN.
Not the friendliest, but I did not want to move to AZ, NV or SD, and only places in WY I liked were too expensive to live (western side of state) and I certainly was not moving to the southeast.



State-by-State Guide to Taxes on Retirees-Kiplinger

[volosong]

Social Security income is not taxed in Idaho. That will help me, but withdrawals from my 403(b) are going to sting.

[Sagle Sam]

Maybe an even more interesting question is how much/what do we get for those taxes?

[the hudge]

I'm retired (Fire Rescue) from Florida and moved to Idaho. Last year I only payed for one quarter of the year but this year I have to pay for the whole year. The State hits me hard but I am much happier here than there.
I (halfheartedly) jokingly call it my "mountain scenery tax".

All in all, its worth it. The state has to make (take) money to keep its lights on and they will ether get it from your paycheck, or from your activities (user fees).