Big income-tax cuts are wrong for Iowa
The income tax is a way we lay the foundation for widespread opportunity in our state. Proposals at the Iowa Capitol would speed up and deepen big personal income-tax cuts passed in 2022 and advance a radical plan to lock in the resulting damage.
Income-tax cuts will blow a hole in the state budget
-
You can’t get something for nothing. The personal income tax generates nearly half the state budget. Slashing the income tax will demand painful, unpopular cuts to services that help Iowans thrive: everything from local public schools and mental and maternal health care to state parks and trails.
-
Although Iowa has a temporary budget surplus lawmakers can use to paper over damage to services in the short term, surpluses are one-time dollars. When they’re gone, they’re gone.
Income-tax cuts rig the system against working Iowans
-
Income-tax cuts are a giveaway to the richest Iowans. The most extreme plans — to eliminate the income tax altogether — would give the top 1% of earners an average cut of $60,000. People in the bottom 20% would get an average cut of $45.
-
Even now, low- and middle-income Iowans pay a higher share of their incomes in total state and local taxes (income, sales and property) than richer neighbors. More cuts to the income tax, our only tax based on the ability to pay, would make the imbalance worse.
Constitutional amendments would lock in breaks for wealthy
-
A proposed amendment would tie the hands of future lawmakers, keeping them from setting income-tax rates based on the ability to pay. By requiring a single, or flat, rate, it would force middle-class and poor families to shoulder much more of the load for our shared responsibilities.
-
Another would further cement inequity by requiring a 2/3 majority for income-tax increases — handing veto power over undoing budget damage to as few as 17 lawmakers and increasing pressure to increase sales and property taxes.
Bottom line: Reckless tax cuts run counter to our state's tradition of common-sense policymaking to promote widespread opportunity. They're wrong for Iowa.
Read more from Common Good Iowa: