CGI News: Senate tax plan sets up Iowa for disaster

Plan to eliminate income tax is anti-services, anti-fairness, anti-democracy

DES MOINES, Iowa (Feb. 1, 2024) – Common Good Iowa today released a statement from executive director Anne Discher criticizing the income-tax elimination proposal filed today by the Senate Ways and Means Chair Dan Dawson, R-Council Bluffs.

"Eliminating the income tax is a bad idea, period. The income tax has provided roughly half of the General Fund budget that supports Iowa PK-12 schools, state universities and community colleges, health care, outdoor recreation and public safety -- services that make Iowa a good place to live, work and raise a family.

"Make no mistake: All of these services will be threatened with drastic cuts should this legislation pass. Even the potentially drawn-out process laid out in the bill to eventually reduce rates to zero does not in the end replace the revenue that will be lost if the income tax is eliminated.

"Moreover, the wealthiest Iowans will benefit most from such a move. If elimination were to happen this year, Iowans making on average nearly $1.5 million would get a tax cut of over $60,000, while a middle-income Iowan making around $73,000 would see a cut of less than $1,500. Low-income Iowans would benefit even less — less than a dollar a week on average.

"Finally, the companion proposal to amend the state Constitution to deny majority rule on tax increases adds a deeply anti-democratic element to the mix. A mere 17 state senators could block a tax increase that may be — and likely will be — needed to correct the mess that income tax elimination would create. It is the height of arrogance for legislators today to suggest blocking future legislators from meeting the needs of this state."

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Editors Note -- The Senate proposals introduced today are here:

Income tax elimination bill, SSB 3141:

https://www.legis.iowa.gov/legislation/BillBook?ga=90&ba=SSB3141

Constitutional amendment requiring 2/3 majorities, SJR 14:

https://www.legis.iowa.gov/legislation/BillBook?ga=90&ba=sjr14