The Senate Ways and Means Committee meeting. (RI photo)

The Senate GOP’s five-year plan to cut the state income tax rate to 3.6% cleared the Senate Ways and Means Committee today on a party-line vote.

The bill also cuts the corporate tax rate, reduces and eliminates some business tax credits, provides a tax break to banks and proposes a new way to finance water quality and outdoor recreation projects. Senator Dan Dawson, a Republican from Council Bluffs, called it a “tax reform” package.

“I feel that this bill goes well beyond just tax cuts,” Dawson said. “It actually modifies and modernizes our system for an economy of the future, the 21st century.”

According to Senator Pam Jochum, a Democrat from Dubuque, the initial analysis shows the tax cut will amount to no more than 28 cents a week for the more than 560,000 Iowans who’re at the bottom of the income ladder.

“I’m not opposed to tax cuts,” Jochum said. “I just want to make sure they’re very targeted to those who need it the most.”

The bill is now eligible for debate in the full, 50-member Senate.