Idaho Gang of Eight: Idaho Families or Government Spending?

January 28, 2026

Idaho Families or Government Spending?
To conform or not to conform. That is the question.

By: Idaho Gang of Eight

The One Big Beautiful Bill, now federal law, provides tax relief to working families across the nation.

The bill includes tax provisions that reduce federal income taxes for many working families and seniors.

• Service workers no longer pay federal income taxes on tips.
• Employees who work overtime hours keep more of that hard-earned pay.
• Seniors on fixed incomes receive an additional deduction to ease their burden.

Idaho’s Choice

States like Idaho are not required to follow these federal changes. Each state must decide whether to accept the tax cuts or reject them.

This decision, called conformity, is not automatic. It requires legislative action.

House Bill 519 proposes aligning Idaho’s tax rules primarily with the federal provisions affecting individual taxpayers—such as tips, overtime, and seniors—while largely limiting conformity on the corporate side.

Put simply, Idaho has two options:

• Accept the tax cuts, so Idaho families also pay less in state taxes, or
• Reject the tax cuts, allowing the state to continue collecting more revenue even as families receive relief at the federal level.

Accept the tax cuts, and families keep more of what they earn.
Reject the tax cuts, and government keeps more of what families earn.

The Governor’s Position

Governor Brad Little has opposed accepting the 2025 tax cuts because they would reduce state revenue by $155 million to $284 million, depending on how much of the federal law Idaho chooses to adopt.

In other words, the Governor is prioritizing maintaining state revenue over returning more of Idahoans’ hard-earned money to them.

This choice is straightforward:

• Accept the tax cuts, and families keep more of what they earn.
• Reject the tax cuts, and government keeps more of what families earn.

The Real Budget Issue

Idaho is facing a budget shortfall. Instead of pursuing meaningful structural budget reform, the governor is relying on a patchwork of temporary fixes that avoid addressing the underlying growth in government spending.

The Gang of 8 is calling for fundamental structural budget reform. As budget bills come before the Legislature, we will vote NO on new spending, NO on new federal money, and NO on new government positions.

In challenging fiscal times, the solution should not be to deny families tax relief to protect government spending.

Idahoans need more of their own money, not a larger government.