GOP: Speaker Upmeyer’s Weekly Newsletter

April 22, 2016
By

UTGD

Tax Day

Late nights at the Capitol filled our week as we continued to put the final pieces of the budget together.  We completed a significant amount of work on a path towards adjournment.

This week, the day that the majority of Iowans (and Americans) dread the most came and went – Tax Day.  We normally think of Tax Day as April 15 but this year it fell on April 18 because of a federal holiday.  However, there is another day related to taxes that Iowans should be aware of as well.

On April 14, Iowa celebrated its Tax Freedom Day which represents how many days Iowans will work just to pay their federal, state, and local taxes.  Tax Freedom Day varies from state to state with Mississippi having the earliest on April 5, and Connecticut having the latest on May 21.  Overall, the national Tax Freedom Day falls on April 24.

Currently, Iowa has some of the least competitive taxes in the country.  According to the Tax Foundation, Iowa’s tax climate ranking is 40th out of all 50 states and Washington D.C.  The ranking combines each state’s corporate, individual income, sales, unemployment insurance, and property tax rates and systems and scores states against each other.  In 2015, Iowa’s tax climate was ranked 41st, so while we’ve improved since last year, more can be done to make Iowa more competitive with other states.

Iowa’s tax rates are:

  • Income – 8.98% (top bracket), ranked as fifth highest in the country
  • Corporate – 12% (top bracket), ranked as the highest in the country

House Republicans have consistently worked to give taxpayers a seat at the table and make sure they are getting a fair shake.  Just this session, House Republicans championed and insisted on legislation that left $95 million in the pockets of the hardworking taxpayers by coupling with the federal tax code and enacting Section 179 depreciation.  After much delay by the Senate, they finally agreed to do right by Iowa’s taxpayers and pass coupling.  This decreased the tax bills of more than 177,000 Iowa taxpayers including small businesses, farmers, teachers, homeowners, and students.

Over the last several sessions, House Republicans have also supported numerous efforts to reduce the tax burden on Iowa taxpayers.  Under Republicans leadership in the Iowa House, the state’s property tax credits have been fully funded, something that hadn’t been done for nearly a decade.  In 2013, the legislature enacted tax reform that overhauled the state’s property tax system and created the Taxpayer Trust Fund to return unused tax dollars back to the taxpayers.  House Republicans have also explored bold, innovative plans to make the state’s income tax system fairer, flatter, and simpler.

The budget is tight this year, which makes opportunities for tax reform more difficult.  However, House Republicans believe that a tough budget situation shouldn’t hamper a conversation on this important topic.  We should always be exploring and discussing ideas for how we can shrink Iowan’s tax bills.  Taxpayers know how to invest their own money, and the legislature should let them do so.

House Republicans will continue the discussion and work to find ways to take less money from Iowa taxpayers and return more to their pockets all while following through on the budget promises we have already made.

As always, please keep in touch.  As legislation is moving forward, feel free to send me comments, questions, or feedback that you may have regarding issues before us in the House. I can be reached at linda.upmeyer@legis.iowa.gov or (515) 281-3521.

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