Earlier this month Governor Terry Branstad was considering a plan to let Iowans keep filing their personal income taxes under the current system, or opt for a flatter, simpler system with fewer deductions. Branstad’s now abandoning the idea.
“I’ll be real frank to say that with the present make-up of the senate and particularly with the present chairman of the Ways and Means Committee, I doubt that we’re going to see anything significant on the tax front this year,” Branstad said during an interview with Radio Iowa.
Branstad is a Republican. The Senate is led by Democrats. Iowa City Democrat Joe Bolkcom — the chairman of the Ways and Means Committee in the Senate — has said Branstad’s “pick your tax system” idea would significantly lower taxes on the wealthy, but do nothing to help middle and lower income Iowans. Branstad said with that kind of staunch Democratic opposition, there’s no way a flat or flatter income tax can pass the senate.
“I’m realistic enough to know that this issue of reducing the income tax burden for both individuals and corporations, making Iowa more competitive, is probably something that will have to be addressed in the 2015 session,” Branstad said.
Income tax reduction will be an issue in the 2014 campaign — both for legislators and in his own race according to Branstad.
“There’s significant differences between the parties on this issue, but I expect that Republicans will run on reforming and improving the tax structure, making us more competitive,” Branstad said. “We’ve already heard the Democrats say that they want a class warfare approach of raising taxes on some, reducing taxes on some other. I don’t think that’s a wise or good public policy for the state.”
Senator Jack Hatch — a Democratic candidate for governor — has proposed a plan he says would either reduce income taxes or keep them the same for 90 percent of Iowans. He’d cut taxes for those who earn less than $150,000 a year, while those who earn $200,000 or more would pay higher taxes. Hatch says that targets tax relief to middle class, working Iowans.