August 30, 2014

House Republicans unveil their own tax cut proposals

Half an hour after Governor Branstad finished his “Condition of the State” speech, Republicans in the Iowa House unveiled their own tax proposals. 

House Republicans are calling for a “flat” state income tax. If their idea becomes law, Iowans would have the option of filing their personal income taxes under the current system — which has a top rate of nearly nine percent — or opting to pay a four-and-a-half percent rate, with no deductions.

The governor has made it clear property tax reform is his top priority, but House Speaker Kraig Paulsen of Hiawatha, the top Republican in the legislature, says Branstad hasn’t said no to cutting income taxes.

“I don’t think that’s off the table,” Paulsen says. “That’s the sense I have.”

Paulsen says Republicans in the House “fundamentally” support reducing property taxes and cutting income taxes.

“There’s a lot of open doors right now,” Paulsen says. “We’ve got to figure out how to get through them.”

House Republicans also propose a new income tax credit for Iowans, but the credit would vary each year. It would be calculated based on how many Iowans paid income taxes the previous year and much money in the state budget plan isn’t spent by June 30 of the following year.