Republican House Speaker Linda Upmeyer says a reduction in Iowa’s corporate tax rate may be tacked onto the tax bill that cleared its first hurdle in the House yesterday.
“I think it’s possible,” Upmeyer told reporters. “We’re not going to preclude any topic at this point, I don’t think. The Senate sent a bill that they have an interest in doing. The governor sent us a bill and we’re going to see what we can do to come up with something that’s just good for Iowans.”
The House bill, as currently crafted, would cut income taxes for individuals, but not corporations. It’s modeled after the tax plan Governor Kim Reynolds unveiled two weeks ago that would cut taxes by about $300 million annually.
The Senate GOP’s plan eventually would cut a billion in taxes each year. Upmeyer said House Republicans intend to be “pragmatic” when it comes to tax cuts, to ensure the cuts don’t endanger the state’s ability to fulfill spending obligations on priorities like education, public safety and health care.
“We want a common sense approach on how we move forward,” Upmeyer said.
The governor’s plan and the House GOP proposal both include “triggers” that would stop any scheduled personal income tax cuts — if state tax collections fail to grow by at least three-and-a-half percent, year-to-year. Upmeyer suggested the same “triggers” could be applied to any cut in corporate taxes.
“We want to make sure we’re able to fund Iowans’ priorities and that additional dollars return to the taxpayer,” Upmeyer said. “Including safeguards, triggers in the plan, I think, could achieve that.”
Senate Republicans propose cutting the state’s corporate tax rate from 12 down to seven percent.