Craig Paulson
The top Republican in the Iowa House says if Republicans win statehouse majorities in the House and the Senate this November, one item on his wish list for 2015 is a “flat” state income tax. House Speaker Kraig Paulsen, a Republican from Hiawatha, spoke early this morning at a breakfast meeting of central Iowa Republicans.
“It’s one of the things that the governor and I have spoken about,” Paulsen said. “…I don’t want to speak for him, but I do know that is something he has interest in as well.”
Paulsen and his fellow House Republicans endorsed a “flat” tax proposal last year, but it was not considered in the Democratically-led Iowa Senate. The proposal would have allowed Iowans to continue filing their income taxes under the current system or choose the alternative of a 4.5 percent flat tax on their income, with no deductions.
“That would be about a $400-500 million income tax cut,” Paulsen said. “My guess is it would grow the state of Iowa (economy) and end up over time increasing revenue because I think that is what’s happened every single time we’ve cut income taxes in the state of Iowa.”
Republican Governor Terry Branstad floated the idea of a “flat tax” in December of 2013, but wound up abandoning the proposal in early 2014 because of Democratic opposition. Democrats say the “flat” tax would provide a “significant’ tax break for wealthy Iowans and do nothing to make the state’s income tax system fairer.