The Grocery Tax Debate

On Monday I laid out the arguments for and against eliminating Idaho’s tax on groceries. I invited feedback, and boy did I get it. What struck me is that there does not appear to be a solid consensus on exactly what to do. Those who support eliminating the tax see it as a high priority, perhaps the highest, and seem incredulous that anyone would disagree, but I received a a lot of feedback from other perspectives as well.

Greg Pruett at the Idaho Dispatch provided some interesting context to the debate, including how Gov. Butch Otter vetoed a grocery tax repeal that passed the Legislature in 2017. That is a good reminder that this debate has been going on for a long time, before many of us were involved in Idaho politics.

This morning, Ron Nate, President of the Idaho Freedom Foundation (IFF), published an article calling on the Legislature to axe the tax:

This coming January, several legislators will be introducing a comprehensive bill to bring Idaho in sync with 38 other states by exempting sales taxes on grocery purchases. Idaho families deserve the relief because it doesn’t make sense to be taxed on the necessities for living. Grocery tax repeal would restore fairness and efficiency to Idaho’s tax structure.

It’s unclear if the upcoming bill will include a repeal the grocery tax credit. On Twitter, Maria Nate, Idaho Director at the State Freedom Caucus Network, called the grocery tax “immoral” and suggested the Legislature should get rid of the tax but keep the credit. I asked if retaining a credit for a tax that no longer exists could be considered redistribution, to which she said that repealing a tax credit is raising taxes.

Cathy Kaech suggested that the government is likely hesitant to get rid of the tax since higher grocery prices means more tax revenue.

An anonymous account called World View Matters! said that both taxing food and taxing property are evil.

Parrish Miller, an activist who writes a lot of IFF’s bill analyses, quoted Milton Friedman: “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.”

Another anonymous account called I AM THAT, I AM said that food is an essential human right, therefore groceries should not be taxed.

Bryan Smith, longtime conservative activist and the Idaho GOP national committeeman, responded via email with a comprehensive essay as to why the tax should be removed. I posted the whole thing on the Chronicle as part of a point/counterpoint editorial. Smith concluded:

Repealing the grocery sales tax is not a close call at all.  Of the 12 states that tax groceries, Idaho is the second highest at 6% only behind Mississippi at 7%.  Several other states that still tax groceries are at 1%.  For some people, a 6% tax on food means the difference between two gallons of milk or just one quart at a weekly trip to the grocery store.  So, for me, it is very simple and obvious:  A person should not have to pay tax to eat at the family dinner table.  Idaho should repeal the grocery sales tax and make it a top priority especially as people suffer during Bidenflation that has caused groceries to skyrocket.

A precinct committeeman from Ada County named Carlos Vidales saw things differently, responding via email with a comprehensive essay of his own. Vidales said that sales taxes are the most fair form of taxation, and that we should repeal the income tax instead. I posted his entire article as the other end of the point/counterpoint. Vidales concluded:

A flat sales tax and all commercial exchanges, all purchases and all services what-so-ever, is by far the fairest tax of all.  Businesses and people who sell more of whatever it is that they produce, would always produce for the government sales taxes in exact proportion to the value of the goods and services they sell.  And the people paying those taxes will pay in exact proportion to their consumption.  What can possibly be more fair than that?

Also on the anti-repeal side, Eagle conservative activist Jerry Gibbs responded on Twitter by pointing out that many out-of-state hunters pay the grocery tax, which brings money into our state. He added that a tax on groceries is perhaps the only tax that many illegal immigrants pay.

A reader named Lori said via email that eliminating the tax is not practical:

Missing from the discussion was the administrative costs to stores and government of maintaining separate tax categories. Traditionally, grocery stores don’t have the profit overhead to throw away on programming into their computers the minutia of which items are taxable or not, or burdening checkout clerks with knowing that.

Removing grocery tax also wastes legislators’ and bureaucrats’ time arguing about the fine points. (Are you going to eat this in the store? So now it gets taxed as a restaurant? Or are you taking it out? Is this hot, roasted chicken you are taking home considered groceries or restaurant?)

Another reader, Betty, said we should leave the grocery tax alone:

I don’t think it makes any difference. Idaho typically has way lower vehicle registrations compared to other states and if they drop the taxes on food then the difference will be made up somewhere else. Maybe higher vehicle registration.

Dropping property taxes and adding special credits for property owners, farmers and ranchers makes more sense.

Darryl and Sheila Ford, Republican activists from Canyon County, said that property tax relief should be a higher priority:

Property tax is higher in our priorities to eliminate because of all the new construction. All these new people will require MORE of EVERYTHING: police, fire stations, wider roads…not to mention a new jail they’ve been wailing about for several years! And the counties will want to divide the increased cost among ALL properties.

Check out today’s Letters to the Editor at the Gem State Chronicle for the full text of those last three responses.

So, have you changed your mind one way or the other after seeing the arguments for and against eliminating the tax on groceries? Should the Legislature try to get this done? If so, where does it fall on your list of priorities? Ron Nate said there will be a bill this year, so we will get to hear public comment and debate next year. This issue has vexed conservatives for a long time, but maybe this is the year something gets done.

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