The Iowa Senate has voted to almost triple a tax break for low-income Iowans.
The state’s Earned Income Tax Credit is currently seven percent and the bill that passed the Senate would raise it to 20 percent. Senator Joe Bolkcom, a Democrat from Iowa City, said it addresses the “crisis of poverty” in Iowa’s working families.
“This legislation cuts taxes for taxpayers that now pay the highest percentage of their income in state and local taxes…although they are among the state’s lowest-paid workers…even though they are working — most working full-time and many working more than one job,” Bolkcom said. “Those facts alone should be enough to convince everyone here to vote for this legislation today.”
The bill passed on a 35-15 vote. Senator Mark Chelgren, a Republican from Ottumwa, suggested Republicans in the House will reject the proposal, just as they did last year.
“We need to work together on this,” Chelgren said. “I’ll be voting for this bill, although I don’t believe it’s a tax reduction. I believe it’s a tax giveaway.”
Senator Randy Feenstra, a Republican from Hull, said the bill is merely a political statement from Democrats.
“Now that we’re down this path, all right, of obviously he said/she said or who’s helping low-income more — I’m pushed to bring this up,” Feenstra said. “…Democrats increased our health insurance by 15 percent. That’s costing every Iowa family approximately $200 a month.”
Bolkcom replied: “I encourage you to check the record on this, Senator Feenstra. You’ve said the biggest concern was that this is not realistic, that going from seven to 20 percent was simply a political move. I would note that on February 14th of last year 48-0 we passed the increase in the Earned Income Tax Credit going from seven to 20 percent over three years. You voted for it.”
AUDIO of debate on SF422
Republicans in the House have passed two different tax cut ideas — a new state flat tax on income and a tax rebate to return much of the state budget surplus to Iowa taxpayers. Republican Governor Terry Branstad repeatedly says his focus this year is on cutting commercial property taxes instead.