First of three Iowa Republican flat tax plans wins approval

cigaretteman

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May 29, 2001
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The Iowa House has approved a plan to gradually move to a “simple, responsible” income tax rate of 4 percent for all Iowans despite warning that it will increase the gap between haves and have-nots and reduce the state’s ability to support services such as education and public safety.


“This is a historic tax bill that will change the climate in the state of Iowa for years to come,” Ways and Means Chairman Lee Hein, R-Monticello, told the House before House File 2317 was approved with bipartisan support, 61-37, Wednesday.


The bill, one of three GOP tax relief plans under consideration, would phase in a four-year gradual reduction in Iowa’s personal income tax rate from the current top rate of 8.53 percent for the highest wage earners to 4 percent for all taxpayers.


Those highest earners will reap the most benefits, according to 39 of 40 Democrats who voted against the bill.


“I am not a millionaire. I do not make a million dollars a year,” House Minority Leader Jennifer Konfrst, D-Windsor Heights, said. “But if I did, I would sure like the tax cuts we've had the last few years.”


Tax relief should focus on middle-class Iowans “who deserve a tax cut most because they've been left behind in other tax cuts,” Konfrst said.


Millionaires will pay more, Hein said. An Iowan with a gross income of $1 million or more would pay “well over $40,000 in taxes” under the plan. A working couple with one child with wages somewhere around $70,000 would pay $3,600.


“Who will pay more taxes? Obviously the rich,” Hein said.


Older Iowans will see a “huge benefit” because the bill exempts retirement income from income taxes. Iowa would become the 13th state to make retirement benefits tax-free.


Tax relief is a priority of Republicans who argue the state can afford to return taxpayers’ “overpayment” by lowering tax rates.


HF 2317 is nearly the same as Gov. Kim Reynolds’ plan in that it would lower the state income tax to 4 percent. Unlike her plan and the Senate bill, the House doesn’t include any corporate income tax relief. The Senate would go further by lowering the tax rates to 3.6 percent and using a state taxpayer relief fund to eventually eliminate the income tax altogether.


Senate File 2206 has been approved by the Ways and Means Committee. The governor’s plan, House Study Bill 551, has been assigned to a House Ways and Means subcommittee.


According to a Legislative Services Agency analysis, the House bill would lower income tax collections by $5.8 billion from fiscal 2023 through fiscal 2028. That would be partially offset with transfers of $829 million from the taxpayer relief fund for a net impact on state revenue of $5.002 billion over six years. Republicans have proposed an $8.2 billion general fund budget for the fiscal year starting July 1.


A 4 percent flat tax, according to House Speaker Pat Grassley, R-New Hartford, “doesn't pick winners and losers. We've been clear since beginning of session, we have the money to pass a tax cut without raising taxes on others.”


“Picking winners and losers. That's what we've been doing for a long time and I think it's time the middle class won,” Konfrst said.


Democrats filed amendments seeking to improve the GOP plan. One by Rep. Steve Hansen, D-Sioux City — who voted for the bill — would lower the tax rate to 4 percent for couples filing jointly with incomes up to $150,000 and 6 percent for others. The top bracket would gradually decrease to 4.82 percent.


Konfrst proposed a new tax bracket that would cap the 4 percent rate at $1 million so those with higher incomes would be taxed 6.5 percent.


Other proposed amendments would have expanded the Earned Income Tax Credit, the credit for emergency medical services personnel, the deduction for teachers’ expenses and increase the Iowa Child and Dependent Tax Credit to 100 percent of the federal credit for those making less than $45,000 a year.

 

your_master5

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Looks like pretty good legislation. Maybe a little fiscal conservation isn't a bad thing for once libs? I don't mind the thresholds where it would cost more for those earning more. That should please the dems. Anything to make taxes easier and government more accountable to spending the better. All Dems argue about is total dollars going down. There's enough waste to button up.
 

sober_teacher

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Mar 26, 2007
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Looks like pretty good legislation. Maybe a little fiscal conservation isn't a bad thing for once libs? I don't mind the thresholds where it would cost more for those earning more. That should please the dems. Anything to make taxes easier and government more accountable to spending the better. All Dems argue about is total dollars going down. There's enough waste to button up.
I don’t object to fiscal conservatism. In my opinion, we have things we need to spend money on to fix. Our lakes and streams are filthy; our roads and bridges need updating; if our schools are as bad as Republicans claim, we need to invest more in them. Instead, we’re cutting revenue, again; which will result in less spending down the road.
 

Huey Grey

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Jan 15, 2013
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Looks like pretty good legislation. Maybe a little fiscal conservation isn't a bad thing for once libs? I don't mind the thresholds where it would cost more for those earning more. That should please the dems. Anything to make taxes easier and government more accountable to spending the better. All Dems argue about is total dollars going down. There's enough waste to button up.
What about school voucher waste? Why are taxpayers footing the bill for private schools?
 

BrunoMars420

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Feb 14, 2016
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So to get this straight. Iowa over charged working class taxpayers so are giving back by giving tax cuts to the rich? Is this really the moronic angle the Rs are using?
Anyone that made more than $6700 is getting a tax cut lolz “ThE rIcH” derrrrrr. Most of the lower income individuals don’t pay much tax once they get their tax credits. Great job Kim!!! Bruno #supports this legislation
 

your_master5

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I don’t object to fiscal conservatism. In my opinion, we have things we need to spend money on to fix. Our lakes and streams are filthy; our roads and bridges need updating; if our schools are as bad as Republicans claim, we need to invest more in them. Instead, we’re cutting revenue, again; which will result in less spending down the road.
"Investing" more in schools and education has rarely actually created value add. It normally doesn't get to the kids with a good ROI. We have enough of a pool of money to spread around properly. Opportunity cost isn't something in the dems playbook. Spend more on everything because everything is a need.

Has anyone looked at the current spending on education, schools, bridges, etc now and see what's going on? Probably not. How about we start there instead of just jumping to we need more money every time.
 

Huey Grey

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Anyone that made more than $6700 is getting a tax cut lolz “ThE rIcH” derrrrrr. Most of the lower income individuals don’t pay much tax once they get their tax credits. Great job Kim!!! Bruno #supports this legislation
A very small tax decrease does working class families no good if you slash school budgets, infrastructure, and a variety of other services. On net they will lose to make up for all these rich tax cuts.
 

BrunoMars420

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Feb 14, 2016
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A very small tax decrease does working class families no good if you slash school budgets, infrastructure, and a variety of other services. On net they will lose to make up for all these rich tax cuts.
Have you not seen the income rates for Iowa? Anyone making like $71k or more as an individual or family is getting their taxes cut in half. Idk how you can consider these “rich tax cuts”
 

torbee

HR King
Gold Member
Well this will be a nice financial boost to Mrs. Torbee and I at least.

For those who were sorta hoping Iowa would still have top notch public schools and robust social services, you have my Ts and Ps. Hey, we tried to vote for the folks that would have taxed us higher, but I guess ya'll know better. God bless and good luck!
 

Tom Paris

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Oct 1, 2001
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Looks like pretty good legislation. Maybe a little fiscal conservation isn't a bad thing for once libs? I don't mind the thresholds where it would cost more for those earning more. That should please the dems. Anything to make taxes easier and government more accountable to spending the better. All Dems argue about is total dollars going down. There's enough waste to button up.
Holy shit. Republican. Fiscal conservatism. You fall for it every damn time. Just like we tell you.
 

Tom Paris

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Anyone that made more than $6700 is getting a tax cut lolz “ThE rIcH” derrrrrr. Most of the lower income individuals don’t pay much tax once they get their tax credits. Great job Kim!!! Bruno #supports this legislation
Oh here's that guy that is thrilled with getting crumbs while the wealthy get a nice steak dinner. This thinking is what the wealthy loves to hear out of us. Yay!! Governor Reynolds is giving me 50 bucks back! Happy days!!!
 

Huey Grey

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Jan 15, 2013
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Have you not seen the income rates for Iowa? Anyone making like $71k or more as an individual or family is getting their taxes cut in half. Idk how you can consider these “rich tax cuts”
I already told you. Working class people will see a small cut but it will be the rich seeing the real cuts. It undeniably favors millionaires.
 

BrunoMars420

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Feb 14, 2016
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I already told you. Working class people will see a small cut but it will be the rich seeing the real cuts. It undeniably favors millionaires.
What is the income range for working class people? A family making $100k will be taxed 4% less, are they not working class and is that a small cut to a family of 4 living on that wage? In terms of millionaires, of course they are getting a bigger cut in terms of real dollars due to their income but the family of 4 with a household income of $100k will also see a nice benefit that will help more than you let on

Also Retired Iowans that saved and did it right won’t be taxed by Iowa on their retirement income. That is fantastic imo
 
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Huey Grey

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Jan 15, 2013
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What is the income range for working class people? A family making $100k will be taxed 4% less, are they not working class and is that a small cut to a family of 4 living on that wage? In terms of millionaires, of course they are getting a bigger cut in terms of real dollars due to their income but the family of 4 with a household income of $100k will also see a nice benefit that will help more than you let on

Also Retired Iowans that saved and did it right won’t be taxed by Iowa on their retirement income. That is fantastic imo
The effective tax rate for two $50k earners in a family is 6.25%. So where are you getting a 4% cut? This family, at best, would save $2,250, and that's if they claim no deductions, which this bill also neuters. In all likelihood, they might see a few hundred dollar cut. Whoopee
 

MepoDawg#

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The effective tax rate for two $50k earners in a family is 6.25%. So where are you getting a 4% cut? This family, at best, would save $2,250, and that's if they claim no deductions, which this bill also neuters. In all likelihood, they might see a few hundred dollar cut. Whoopee
So you don’t like flat taxes where everyone pays the same percentage?
 

torbee

HR King
Gold Member
So you don’t like flat taxes where everyone pays the same percentage?
Progressive taxes are the norm in most democracies for a reason.

Advantages of a Progressive Tax​

On the pro side, a progressive tax system reduces the tax burden on the people who can least afford to pay. That leaves more money in the pockets of low-wage earners, who are likely to spend all of that money on essential goods and stimulate the economy in the process.


A progressive tax system also tends to collect more taxes than flat taxes or regressive taxes, as the highest percentage of taxes is collected from the highest amounts of money.


A progressive tax also requires those with the greatest amount of resources to fund a greater portion of the services that all citizens and businesses rely on, such as road maintenance and public safety.



Disadvantages of a Progressive Tax​

Critics of progressive taxes consider them to be a disincentive to success. They also oppose the system as a means of income redistribution, which they believe punishes the rich, and even the middle class, unfairly.


Opponents of the progressive tax generally are supporters of low taxes and correspondingly minimal government services.

 

Jerome Silberman

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Oct 30, 2009
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What is the income range for working class people? A family making $100k will be taxed 4% less, are they not working class and is that a small cut to a family of 4 living on that wage? In terms of millionaires, of course they are getting a bigger cut in terms of real dollars due to their income but the family of 4 with a household income of $100k will also see a nice benefit that will help more than you let on

Also Retired Iowans that saved and did it right won’t be taxed by Iowa on their retirement income. That is fantastic imo
All broad based tax cuts like the proposed 'flat tax' end the same. With the middle-class getting f@cked in the @ss.
 

torbee

HR King
Gold Member
All broad based tax cuts like the proposed 'flat tax' end the same. With the middle-class getting f@cked in the @ss.
You can expect Iowa to enact a bunch of new service fees and other revenue-generating schemes to make up for the hundreds of millions in lost revenue from moving to a flat tax. Those new fees will effectively negate any savings middle income earners derived from the flat tax, while barely being couch cushion money for the millionaires.
 

MepoDawg#

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Oct 29, 2012
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Progressive taxes are the norm in most democracies for a reason.

Advantages of a Progressive Tax​

On the pro side, a progressive tax system reduces the tax burden on the people who can least afford to pay. That leaves more money in the pockets of low-wage earners, who are likely to spend all of that money on essential goods and stimulate the economy in the process.


A progressive tax system also tends to collect more taxes than flat taxes or regressive taxes, as the highest percentage of taxes is collected from the highest amounts of money.


A progressive tax also requires those with the greatest amount of resources to fund a greater portion of the services that all citizens and businesses rely on, such as road maintenance and public safety.



Disadvantages of a Progressive Tax​

Critics of progressive taxes consider them to be a disincentive to success. They also oppose the system as a means of income redistribution, which they believe punishes the rich, and even the middle class, unfairly.


Opponents of the progressive tax generally are supporters of low taxes and correspondingly minimal government services.

So you and those with your thinking say those who earn more should pay more just because they have more money. People who earn more don’t necessarily use infrastructure or public safety any more than those who don’t earn much. Maybe they should raise the sales tax and use tax.
 

your_master5

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Dec 15, 2002
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What better argument? They are private schools. Public funds should not be used on them.
The argument is the money follows the child. You don't like it because it could go to private schools if the parent chooses. If I don't use the public school system, then I shouldn't have to pay the tax. Either that or the money I pay goes with my kid. Liberal hive minds.
 

torbee

HR King
Gold Member
So you and those with your thinking say those who earn more should pay more just because they have more money. People who earn more don’t necessarily use infrastructure or public safety any more than those who don’t earn much. Maybe they should raise the sales tax and use tax.
It's really a pretty simple concept. As you can see the only "con" to a progressive tax is based primarily on feelings of grievance, whereas the pros are a net benefit to society at large.

And again, this is why virtually every single Western democracy utilizes a progressive tax system.
 

BrunoMars420

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Feb 14, 2016
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I know I mentioned this in another thread but I would rather have a progressive tax rate. I am not opposed to this flat tax for Iowa as I think it is a bigger benefit for the majority of citizens but believe we should still have lower or no income taxes for the lower income households. Top rate at 4% and make it the other income levels progressive
 

MepoDawg#

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No. I hate a tax system that has people in poverty paying the same rate as millionaires. And I hate it even more when services for those in povery are slashed to compensate for all these rich tax cuts.
Why isn’t it fair to pay the same rate on all income?
 

your_master5

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In America, we elect leaders who can take taxes, and then spend them on public programs. Do you hate America?
Nope, I don't like giving my money to public programs that are wasteful, are not being used by me, and may be worse off for my kid. Maybe we can spend more on of our taxes on buying more crack pipes. That sounds good.