First of three Iowa Republican flat tax plans wins approval

MepoDawg#

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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.
There are other ways to tax and make up the difference. Sales tax, use tax etc.
 

Huey Grey

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Jan 15, 2013
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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.
And now you have entered the pouting stage.
 
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your_master5

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Why isn't Reynolds doing this then?
Lol. The conservative stance is the money follows the child. Not sure how I can help you anymore than that. You just come back with those are private schools. That's your only argument.
 

MepoDawg#

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Do I really have to explain why?
There isn’t a logical answer. You’re punishing people for earning more that they worked for the same as lower income workers. I’m fine with charging them for more on sales/use tax for example if they’re buying/using more with their higher income.
 

Huey Grey

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Lol. The conservative stance is the money follows the child. Not sure how I can help you anymore than that. You just come back with those are private schools. That's your only argument.
I don't need another argument. If you can't understand the difference between private and public spending, then that is on you.
 

your_master5

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I don't need another argument. If you can't understand the difference between private and public spending, then that is on you.
lol sure dude. I bet you're all for these jabs out here. Ooooh but that's different spending I'm sure in your mind.
 

MepoDawg#

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Sales tax disproportionately affect lower incomes.
So they should get a break there, too? People who earn more usually buy more thus leading to more sales tax revenue. People who earn more use roadways more, buying more gas thus paying more in taxes.
 

Keehawk

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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
What's it like to live such a bitter life? I can't even imagine.
 

Huey Grey

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There isn’t a logical answer. You’re punishing people for earning more that they worked for the same as lower income workers. I’m fine with charging them for more on sales/use tax for example if they’re buying/using more with their higher income.
The logical answer is that you can't squeeze juice from an orange with none to give.

And again, sales taxes disproportionately affect working class people. You're literally arguing for a tax system that punishes working people.
 

Huey Grey

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So they should get a break there, too? People who earn more usually buy more thus leading to more sales tax revenue. People who earn more use roadways more, buying more gas thus paying more in taxes.
Sorry, but it's proven that it negatively affects working class people more.

And you also are admitting that this isn't actually a tax cut. It just shifts where the taxes are being charged.
 

torbee

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Gold Member
There are other ways to tax and make up the difference. Sales tax, use tax etc.
Correct, and those are regressive taxes.

Here are the pros and cons of that concept:

Advantages of Regressive Tax​

Regressive-Tax-Advantages-e1602407981418.png

1. Encourages people to earn more​

When people at higher income levels pay lower levels of tax, it creates an incentive for those in lower incomes to move up into higher brackets. This contrasts with a progressive tax that charges people higher amounts as they reach higher brackets. So for someone earning $39,000, it makes little sense to earn $50,000 which takes them into a bracket that pays an extra 10 percent.

A regressive tax will eliminate this disincentive and actually do the opposite. This encourages people to move into more productive and higher-paying positions.

2. Higher Revenues​

This may seem strange, but when taxes on the rich are lower, they tend not to take such extreme measures to avoid paying it. In turn, instead of money going to the likes of Switzerland and Monaco, it is paid to the government in taxation. This is because the incentive to avoid it is lower. For example, tax avoidance costs the rich millions in lawyers and accountancy fees. As the rate of taxation is reduced, the cost-benefit of hiring those professionals also reduces.

3. Increases Savings and Investment​

In a regressive system, those who earn higher incomes tend to save more, thereby increasing the saving rate of the nation. In turn, those savings become capital available for businesses to invest in new productive and more efficient machinery.


4. Simplicity​

A lot of regressive taxes are also flat taxes but are regressive in the fact that they are disproportionately paid for by lower-income households. Yet they are very simple in their implementation. For instance, the sales tax is straightforward – a 5 percent tax on each and every item. By contrast, the progressive income tax has to be calculated to determine the bracket, how much is earnt on that additional income, and how much is charged because it comes from capital. It requires thousands of workers just to administer such a system, but a regressive flat tax is simple.

5. Reduces a ‘Brain Drain’​

When tax rates are more progressive, they can result in a loss of talent, also known as ‘brain drain’. This is where skilled professionals leave the country to find work elsewhere. By implementing a progressive system that taxes the rich at a higher rate provides an incentive for highly skilled professionals to move elsewhere.

For instance, someone who has worked 10 years to become a surgeon earning $150,000 a year may face a marginal tax rate of 50 percent. All that work and effort, only for half their income to be taken away. As a result, they may look to other nations that provide a more regressive tax system that is objectively fairer.


Disadvantages of Regressive Tax​

Regressive-Tax-Disadvantages-e1602408212349.png

1. Inequality​

A regressive tax imposes a higher tax burden on those with lower incomes than those at higher incomes. Therefore, it creates a downwards pressure on the number of local income households can save. They are forced into paying a higher percentage of their incomes in tax, thereby leaving less for them to save. With lower savings, it becomes difficult to get onto the housing ladder and gain equity through the property. In turn, a poverty trap is created whereby low-income households are burdened by taxes – preventing them from accumulating capital.

2. Higher Prices​

It goes without saying that the higher the tax, the higher the price. Yet for regressive taxes such as tariffs, it is often questioned. The price of a tariff will not always be passed on to the customer as the imported may take some of the cost. However, it falls predominantly on the consumer as businesses protect their profit margins.

The consumer also faces higher prices for other goods. For instance, excise taxes are imposed on goods such as sugary drinks, cigarettes, and alcohol – products that are often associated with low-income households.


3. Reduces Choice​

Regressive taxes such as excise taxes, tariffs, and sales taxes, all help reduce demand for goods. That lower level of demand makes it more difficult for a wider variety of firms to make a profit. As prices as higher, there is less demand, and because there is less demand, there is less room for competition.

At the same time, smaller levels of demand make it more difficult for existing firms to fully benefit from the same economies of scale.

4. Political Unrest​

Taxation will always be a moral issue. However, when it starts affecting a significant number of households disproportionately, people can become discontented. If they see, as they do today, millionaires and multinational companies paying little tax, it becomes a significant moral issue. We like to see a fair system, so when the public see the rich paying little tax, there is understandable outrage. In turn, we often see sharp turns in the politic sphere – either sharply to the left, or sharply to the right.
 

torbee

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Gold Member
There isn’t a logical answer. You’re punishing people for earning more that they worked for the same as lower income workers. I’m fine with charging them for more on sales/use tax for example if they’re buying/using more with their higher income.
Why is it a punishment? I don't understand this feeling of grievance.

You are INVESTING in a society/community/government structure that is designed to support your business, your livelihood, etc. Better schools mean better and smarter workers. A better environment means better recreational opportunities, safer drinking water, etc., etc.

A real world example: Mrs. Torbee's company has a fleet of trucks that take product between branches in 3 states. Better infrastructure means less wear-and-tear on the trucks, less frequent replacement, etc. A better healthcare system that is affordable for her workers means less days missed and higher efficiency from workers. Those types of expenditures by government save money to businesses and individuals in the long term.

My wife and I are in a fairly high tax bracket here in Iowa -- but Iowa has been a FANTASTIC place for us to raise our family and for us to work and build wealth. We want to see it remain fantastic -- and since we can afford it, we don't feel overly burdened by being asked to contribute more than others who have not been as privileged or lucky or - gasp - even as hardworking as we have. We consider it part and parcel of being good citizens.
\
 
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abby97

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What about school voucher waste? Why are taxpayers footing the bill for private schools?
How is a school voucher funding private schools? If a tax paying parent wants to spend the money their child would get to attend a public school, to send their child to a private school instead, sounds like a rational idea. Why should a child be forced to go to a public school? The public school education has gotten worse and worse over the years so giving parents an option for their children seems smart.
 

abby97

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Why is it a punishment? I don't understand this feeling of grievance.

You are INVESTING in a society/community/government structure that is designed to support your business, your livelihood, etc. Better schools mean better and smarter workers. A better environment means better recreational opportunities, safer drinking water, etc., etc.

A real world example: Mrs. Torbee's company has a fleet of trucks that take product between branches in 3 states. Better infrastructure means less wear-and-tear on the trucks, less frequent replacement, etc. A better healthcare system that is affordable for her workers means less days missed and higher efficiency from workers. Those types of expenditures by government save money to businesses and individuals in the long term.

My wife and I are in a fairly high tax bracket here in Iowa -- but Iowa has been a FANTASTIC place for us to raise our family and for us to work and build wealth. We want to see it remain fantastic -- and since we can afford it, we don't feel overly burdened by being asked to contribute more than others who have not been as privileged or lucky or - gasp - even as hardworking as we have. We consider it part and parcel of being good citizens.
\
Pat yourself on the back. I would rather keep more of my own hard earned money.
 

abby97

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The child isn't forced to attend a public school,... the child's parents are forced to fund the public school.
Why? When the public schools have abdicated their mission to teach reading writing and arithmetic and are more concerned with teacher unions, CRT and the like, parents deserve an option. It's their tax dollars after all.
 

abby97

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Right, because you care more about yourself than the society you live in.

Which is why I will never be a conservative.
No you aren't bright enough to be a conservative. That's okay the world needs ditch diggers too.
 

HawkRCID

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I’ll take the cash whatever….but it’s hilarious I have heard some people say this will help fix the problem of folks leaving the state….LOL nope, that doesn’t have much to do with the tax rate…that’s more about Iowa on its March to becoming Mississippi North…without nice weather
 
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swagsurfer02

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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!

I have an account that you can donate to for my surgery.
 

Rifler

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Why? When the public schools have abdicated their mission to teach reading writing and arithmetic and are more concerned with teacher unions, CRT and the like, parents deserve an option. It's their tax dollars after all.

We need public schools for the same reason we need publicly funded roads, bridges, fire departments & police protection,... These are foundational elements of society.
 
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archmage2002

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Lol. The conservative stance is the money follows the child. Not sure how I can help you anymore than that. You just come back with those are private schools. That's your only argument.
Private schools are for-profit schools. I don't think public tax money should go to fattening some schools' bank account. Another aspect that I have a severe problem with is that a lot of private schools are religious-based. Public tax money should not be funding Catholic, Muslim, Jewish, etc schools.
 

Hawk_4shur

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So, we pay taxes for all kids, not just those who don't go to private schools. Give a better argument.
The CR Municipal golf courses are a pretty good value, especially if you play a lot and get a season pass. And, the last time I heard, the City loses money on the golf courses.

So, as a golfer, how about giving me that money the City spends on golf courses so I can join CRCC? Shouldn't all Iowa golfers be treated the same?

:rolleyes:
 
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theiacowtipper

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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.
As a society, we have a vested interest in a well educated youth. They pay back that education by working later in life and paying taxes. if a private school can do it more efficiently, I’m all for them doing it. They have to take everyone. The delinquents. The learning disabled. The kid with autism. The kid with cerebral palsy. I’m against finding two separate systems. It’s a waste of taxpayer money.
 
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theiacowtipper

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Why? When the public schools have abdicated their mission to teach reading writing and arithmetic and are more concerned with teacher unions, CRT and the like, parents deserve an option. It's their tax dollars after all.
Full of 💩💩💩💩. You have no interest in my kind of intelligent discussion and are only looking to troll. Literally, not one secondary school in Iowa teaches CRT. Teachers unions in Iowa are simply powerless, neutered by an extremist Republican agenda.

Parents have an option. Pay tuition at a private school. Open enroll. If it’s "my" tax dollars, and since I don’t nor have i ever had a kid, why do I have to fund it?
 

SSG T

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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?

What else would they do? They'll sell it as "everyone has to pay their fair share" while ignoring reality.

And their voters will eat it up...because they are not smart.
 

BioHawk

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Sep 21, 2005
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It's a good thing Iowans like to make fun of Illinois's finances and are now going to the same basic system of taxation that Illinois uses.
 

DogBoyRy

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It's a good thing Iowans like to make fun of Illinois's finances and are now going to the same basic system of taxation that Illinois uses.
You might want to compare public pension liabilities.
Illinois is circling the drain. Once the market stops hiding their problems it’s headed to junk bond status.
 
Apr 18, 2021
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Buckhead GA
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.

In reading this Iowa should become the model for the rest of the U.S.

Kudo's to the GOP on this one!
 

archmage2002

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I did some research into exactly how much tuition costs at places like Regina and then compared them to the public costs. The Regina information was found from a PDF on tuition rates from the Diocese of Davenport for 20-21 school year, the other from US Public Education Spending.

Regina K-6th - $9,630 a year.
Regina 7-8th - $11,915 a year.
Regina 9-12th - $17,995 a year.

Iowa Public K-12th - $11,656 is spent a year. 3.96% of our state taxes go towards public education so a 4% flat tax would absolutely cripple public education. One thing to note is that nothing was listed for how many students were special education needs students, I suspect if that was removed it would be even cheaper.

Btw, stop bringing CRT into the discussion. CRT being taught in elementary/middle/high school is a red herring made up to scare gullible fools. CRT is only being taught in a high-level college course and would be something a regular Bachelor's degree wouldn't even sniff at. It would only be seen at the Masters or Ph.D. level.
 

DogBoyRy

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Jul 28, 2006
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I did some research into exactly how much tuition costs at places like Regina and then compared them to the public costs. The Regina information was found from a PDF on tuition rates from the Diocese of Davenport for 20-21 school year, the other from US Public Education Spending.

Regina K-6th - $9,630 a year.
Regina 7-8th - $11,915 a year.
Regina 9-12th - $17,995 a year.

Iowa Public K-12th - $11,656 is spent a year. 3.96% of our state taxes go towards public education so a 4% flat tax would absolutely cripple public education. One thing to note is that nothing was listed for how many students were special education needs students, I suspect if that was removed it would be even cheaper.

Btw, stop bringing CRT into the discussion. CRT being taught in elementary/middle/high school is a red herring made up to scare gullible fools. CRT is only being taught in a high-level college course and would be something a regular Bachelor's degree wouldn't even sniff at. It would only be seen at the Masters or Ph.D. level.
Might want to double check that public school number.
Just sayin.