Republicans in the Iowa House and Senate are pushing plans that give tax breaks to Iowa seniors. The House will debate a bill later today (Tuesday) that would gradually erase state income taxes on pensions and Social Security for Iowans who’re retired. House Speaker Christopher Rants, a Republican from Sioux City, says it’s an attempt to keep retirees from leaving the state. “I got an e-mail from one of my constituents who is moving to South Dakota,” Rants says. “To use his words: ‘the state of Iowa is not going to take nine percent of my retirement income.'”
Rants says if Iowa doesn’t repeal the “retirement tax” the state will continue to see retired residents move to other states with lower taxes on pensions and Social Security income, or no taxes at all on that retirement income. House Democrats plan to offer an alternative plan that would see the state eliminate all state income taxes for single seniors who make less than 36-thousand dollars a year.
House Democrat Leader Pat Murphy of Dubuque says they’d also like elderly couples earning less than 48-thousand dollars to be excused from paying state income taxes. “We don’t think that, quite frankly, somebody making a six-figure income in retirement should be treated the same as someone who’s depending on six- or eight-thousand dollars a year and then renting off their farm,” Murphy says.
Representative Kurt Swaim, a Democrat from Fairfield, says retired executives will make a “killing” under the Republican tax plan, while the Democrats’ tax cut targets the neediest Iowans. “Our plan is a better plan because it covers more people. It covers the people (who need) it,” Swaim says. “And it doesn’t cover the people who don’t need it.”
House debate of the two competing tax packages for seniors is scheduled to begin at 4:30 this (Tuesday) afternoon. Meanwhile, Republicans in the Senate want to give a property tax break to elderly Iowans who’re poor. Under their plan, senior citizens with an annual income of 25-thousand dollars or less would get the property taxes on their homes frozen at current levels.
Senator Mark Zieman, a Republican from Postville, says high property taxes are pushing some poor seniors out of their homes and into government-subsidized housing. “This is not a unique plan,” Zieman says. “The states around us — Illinois, Minnesota, Missouri, Nebraska and South Dakota — all have something similar to this type of a plan in place to help the poorest of our seniors to stay in their homes.”
Senate Republican Leader Stewart Iverson, a Republican from Clarion, says state policy needs to encourage seniors to stay in their homes as long as possible, and their proposal targets the neediest. “We have half of the people over 65 years old in the state of Iowa with a gross income of $25,000 or less,” Iverson says. “It is a huge problem.” Senate Democrats, however, have not signed on to this proposal and that’s necessary before it can be debated in the Senate.