Governor offers income tax reform plan in compromise for economic development plan

Governor Tom Vilsack has offered an income tax reform plan he hopes will be the linchpin to bringing agreement on other issues pending before the Legislature. Vilsack’s idea would yield a 300-million dollar income tax cut for Iowans, but that would be coupled with an increase in other taxes, like the cigarette or sales tax. Vilsack suggests making the income tax cut effective in three years — giving lawmakers time to figure out an acceptable combination of other tax hikes to compensate for the income tax cut. Vilsack says House and Senate Republicans haven’t reached consensus on tax issues, and he calls his idea a “framework” for “getting the job done.”Vilsack says it’s similar to the approach House Republicans have taken on property tax reform — proposing a new method of calculating the tax but delaying the implementation for three years to work out the bugs. He says there may be other ideas and they don’t want to overlook something in the stress and pressure to get something done.Senate Republican Leader Stewart Iverson of Dows has complained that Vilsack isn’t lining up Democrat votes for income tax reform. Vilsack says it’s been premature to start that process and Vilsack says he’s been frustrated by the discussion of how he’s “supposed to be doing things when the problems are not between Democrats and Republicans, they’re between Republicans and Republicans.”