Why Would We Settle for Anything
Less Than The Governor's Tax Plan?
State and local government in Iowa takes too much of your money and Iowans for Tax Relief wants to change that. The good news is tax discussions are taking center stage within the Iowa Capitol as the end of the legislative session approaches.
With the goal of providing a compromise among competing ideas about tax relief, Governor Kim Reynolds presented both chambers with her own tax plan this week.
And it’s good. Really good.
At a news conference Wednesday, Governor Reynolds outlined the contents of her legislation and said, "Iowa has never been in a better position to take tax burdens off the backs of Iowans and invest state revenue to sustain critical and important services. Now's the time to come together and take action, and that's exactly what I'm asking the House and the Senate to do in the remaining days of the legislative session."
ITR works for lower taxes and less government spending so that politicians will get their hands out of your wallet. In recent years, the Iowa Legislature has taken steps toward that goal. This year, taxpayers expect elected officials to continue that progress.
The foundation of the governor's plan would deliver many items ITR has been working on for years:
Income Tax Cuts:
The 2018 tax reform law was a good start to reducing Iowa's high-income tax rates. However, the most significant tax cuts from that bill have yet to be implemented. Removing all revenue hurdles would ensure those planned cuts go into effect.
Reduce Property Taxes:
For most Iowans, there isn't a more frustrating tax in Iowa than property taxes. It is too easy for local governments to ride the wave of increasing property values as they vote for bloated budgets. In Governor Reynolds’s plan, the $100 million mental health levy would be completely eliminated from county property taxes and fund mental health services through the state's budget.
Eliminate the Inheritance Tax:
The Iowa inheritance tax takes around $110 million from taxpayers each year. The House, Senate, and Governor Reynolds agree that it's time to bury this tax. They just differ on how long it should take. Governor Reynolds has proposed a three-year phase-out.
End the Backfill:
Based on 2013’s property tax reforms, Iowa’s state government “backfills” local governments. More than $152 million is paid to cities, counties, and school districts each year, despite the fact that many local governments are now collecting more tax dollars than they did before those earlier reforms. Governor Reynolds says now is the time to do this because of how much local government budgets have grown and because of the influx of federal funds being distributed through coronavirus stimulus packages.
Senate Majority Leader Jack Whitver said the governor's plan is "the path to adjournment" for this year's session. "I appreciate the leadership from Governor Reynolds and her proposal of a thoughtful, pro-growth compromise on Iowa tax policy," Whitver said. "Senate Republicans are supportive of her proposal, and we will be taking action on it in the coming days."
Taxpayers expect conservative leaders to prioritize family budgets over government budgets. If legislators can’t follow the governor’s lead on taxes, they are sending a very clear message to Iowans that increasing government spending is more important to them than letting Iowans keep more money in their own pockets.
Here's Your $95 Million Back
Governor Reynolds has also been a strong leader on the subject of federal stimulus dollars. In a recent Fox News interview, the governor was asked about what should be done with unnecessary federal money that comes with strings attached and only adds to the national debt:
"I just returned $95 million because they sent an additional $95 million to the state of Iowa to get our kids back in the classroom by doing surveillance testing. And I said we’ve been in the classroom since August. Here’s your $95 million back.”
That's fantastic.
When asked about the decision to return the money at her press conference, the Iowa Field Report said she "dropped a dose of Iowa common sense" with the statement:
"We can't just continue to take this money. There is a cost to taxpayers. The amount of money flowing into states because of the other states' bad decisions is unconscionable. At some point, you have to say enough is enough."
Because of the governor’s leadership and work to keep Iowa open for business as much as possible through the COVID-19 pandemic, our state is not dependent on these federal funds. In fact, Iowa is ranked as having the second quickest recovery from the impact of COVID.
Iowa’s strong economy is why we are even able to talk about tax cuts right now.
Links of Interest
Fed's American Rescue Plan Act sends over $5 billion to Iowa.
- LSA Fiscal Note
Donor Privacy HF 309 - Passed House 84-9 February 23; Passed Senate 45-1 April 13; Sent to the governor
Local Gov't Transparency and Taxpayer Information Protection HF 765 - Passed House 92-0 March 11; Passed Senate 46-0 April 21; Sent to the governor
Updated This Week:
Governor's Tax Reform Plan SSB 1276 - Introduced, referred to Senate Ways and Means
Department of Revenue Modernization SF 608 - Passed Senate 48-0 April 28 HF 890 (HSB 273) - Scheduled for debate in House today, May 7
No Change This Week:
Income Tax, Economic Development, and Tax Credit Reform SF 609 - Passed Senate Ways and Means Committee April 22; Fiscal note released April 26
Health and Human Services Spending SF 606 - Passed Senate Appropriations Committee April 20
This bill contains the language previously passed by the Senate regarding public assistance asset verification.
Eliminate Iowa's Inheritance Tax HF 841 - Passed House subcommittee March 29; Fiscal note released April 13
Income and Property Tax Reform SF 587 - Passed Senate 30-17 Tuesday; Introduced in House; Fiscal note released April 12
Income Tax Reform and Eliminate Inheritance Tax SF 576 - Passed Senate 46-0 March 17; Sent to House; Fiscal note released April 5
Taxpayer-Funded Lobbyist Transparency HF 822 (HF 346) - Passed House 91-3; Passed Senate State Gov't Committee April 1
Occupational Licensing Reform SF 487 - Passed Senate 30-17 March 17; Passed House State Gov't Committee April 1 SF 354 - Passed Senate 48-0 February 17; Passed House State Gov't Committee March 24
Deductibility of PPP Loan Forgiveness SF 364 - Passed Senate 49-0; Passed House with amendments 94-0; Sent back to Senate March 4 HSB 195 - Passed subcommittee SSB 1198 - Assigned to a subcommittee SF 196 - Assigned to a subcommittee
Open Records Request Costs HF 786 (HF 637) - Passed House State Government Committee and Assigned to House Ways and Means Committee March 5 SF 480 (SF 218) - Passed Senate State Government Committee February 25
Eliminate Iowa's Inheritance Tax SSB 1026 / HF 48- Passed Senate subcommittee / Assigned to House subcommittee SF 16 - Assigned to a subcommittee; Fiscal note released February 1
Additional Property Tax and Income Surtax- ITR Opposes SF 258 (SF 117) - Passed subcommittee
