State revenue experts say they’re anxious to know how many Iowans got out of the stock market when the bottomed dropped out last year, and how many decided to hold on to their battered stock portfolios.
Senior analyst, Jeff Robinson, with the Legislative Services Agency told lawmakers the decisions on the market will have in impact on how weak state tax receipts might be, especially capital gains taxes, which go down when taxpayers claim losses on investments.
"That’s one of the big ifs in this current estimates, is if people will see those losses and show them on their tax returns in the spring," Robinson says. Robinson says analysts must decide how much to lower their estimates of capital gains collections, and which year to register the losses.
Robinson says, "Currently we’re trying to work our way through the issue of whether that will show up this year or next year."In the last recession in 2002, tax receipts overall dropped by 200 million dollars, and analysts say capital gains losses were a big part of that. Robinson says much of those loses showed up in the second year after stocks started to fall.
Robinson says estimates will be hard to make before Iowans actually file their taxes by April 15.