Two research groups are urging the governor to strike down a new tax cut approved during the special session. Both say its 300-million dollars in income tax cuts benefit the wealthy at the expense of poor Iowans. Peter Fisher with the Iowa Policy Project says the cuts will seriously push state revenues down at a time when the state needs to bring in more, not less.Fisher says we’re “building in ” a situation even less adequate to pay for services, fund the state’s fire stations, and maintain class sizes with an income tax cut that’s 300-million a year. And Fisher says for the first three years of the plan, forty-percent of Iowans will actually pay more in taxes than they do now. Fisher says the so-called tax relief targets 60-percent of its benefits at the top 20-percent of Iowa earners, the richest 20-percent. Fisher says benefits to most taxpayers of the overall fifteen-percent income-tax cut are offset by a delay in the scheduled phase-out of a utility tax, which will eat up the savings. Charles Bruner with the Child and Family Policy Center says Bruner says it would cause serious harm in terms of tax fairness and bringing adequate revenue into the state, and he adds as a political tradeoff for the Iowa Values fund, it’s “too high a price to pay.” Bruner says he’s urging governor Tom Vilsack to veto the tax cut even if it means also giving up the 500-million-dollar Iowa Values fund the governor fought for and bargained for with lawmakers. But republican legislature say the tax cut and economic-development fund were linked on purpose, because both are needed to stimulate the state’s economy.
