If legislators don't lock in rate cuts this year, they are telling taxpayers that increasing government spending is more important than letting Iowans keep more money in their own pockets.
The issue before legislators is simple: cut taxes or increase government spending. The Governor's income tax reform bill was introduced in both chambers this week. As written, the bill would let Iowans keep more money in their bank accounts in several ways.
How likely is it that Iowa’s tax climate will be improved this year?
There seems to be momentum behind this idea in two important spots. This is the second year in a row that the Governor has introduced a bill to ensure lower tax rates. Last year, the Senate Ways and Means Committee advanced legislation to ensure lower rates, and new Ways and Means Chairman Dan Dawson has said the Senate will work on similar legislation again this year.
Over the next few weeks, ITR will provide a more detailed analysis, but here are the main aspects of the Governor’s proposal:
Removes revenue triggers from 2018's tax reform bill and locks in an income tax cut from 8.53% to 6.5%
Reduces individual income brackets from nine to four
Simplifies state tax code by increasing conformity with federal tax law
Ensures Payroll Protection Program (PPP) dollars and other qualifying COVID-19 grants are not taxed
The 2020 election results offered a clear mandate from voters: they like the direction the Governor and legislative leaders are taking this state and want to see more conservative policies advanced.
So, if this reform doesn't pass this year, some legislators are telling Iowans that increasing government spending is more important than letting Iowans keep more money in their own pockets.
Click the button below for a simple way to send a message to your legislators.
The government takes too much of your money and time. That is why ITR works for:
We encourage Iowans to make their voices heard. Politicians will continue to spend more money if taxpayers sit back and quietly pay our tax bills.
Barb Kniff from Pella spoke up this week with a letter to the editor about Iowa's inheritance tax. In her letter, Barb said:
"The inheritance tax really comes into focus with small business planning. In my personal business planning, the inheritance tax means some difficult decisions must be made to ensure my business can outlive me—decisions that I would not necessarily choose to make in a different tax environment."
ITR encourages you to speak up too. Send a letter to the editor of your local paper or contact your elected officials.
In case you missed last week's newsletter, your next property tax increase is being determined right now. Click here to read it and speak up.
City & County Local Entertainment Surcharge- ITR Opposes HF 213 - Introduced; Assigned to a subcommittee
Open Records Request Costs SF 218 - Introduced; Assigned to a subcommittee
Occupational Licensing Reform SSB 1046 (Review and sunset of professional licenses) Passed out of subcommittee HF 132 (Remote continuing education credits) Passed out of subcommittee SF 163 (Continuing education requirement deadline) Passed out of subcommittee
No Change This Week:
Donor Privacy SSB 1036 - Passed Senate subcommittee HF 309 (HSB 28) - Passed out of House Judiciary Committee
Eliminate Iowa's Inheritance Tax SSB 1026(formerly SF110/HF48) Passed Senate subcommittee / Assigned to House subcommittee SF 16 Assigned to a subcommittee; Fiscal Note
Dave Roederer, Iowa's chief budget officer for the last decade, announces retirement - DM Register
ITR congratulates Dave Roederer on his well-earned retirement. Dave was a champion for Iowa taxpayers, and a thoughtful steward of their hard-earned tax dollars. Iowa is a better place for his service.
Michael Bousselot, ex-Branstad chief of staff, named Department of Management director - DM Register
ITR looks forward to working with incoming Director Michael Bousselot. We are confident that the administration of Governor Reynolds will continue to advocate for Iowa taxpayers.