Whitver says eliminating Iowa income tax should be goal
Iowa’s top Senate Republican has said every taxpayer in Iowa should get an income tax cut, but Senate Majority Leader Jack Whitver of Ankeny said the ultimate goal should be to completely eliminate state income tax.
âRight now there are about eight states that have no income tax. There are eight other states that have said, âWe want to go down the path of no income tax. And I would like Iowa to be included in the states that say, “At the end of the day, the point is to do nothing,” Whitver said during a recent appearance on “Iowa Press” on Iowa PBS. âHow do you do that, it’s difficult. It takes time, but it should be the goal, to get rid of our income tax. “
A century ago – in 1921 – Iowa was the first state in the country to impose a tax on cigarettes, then in 1934 the Iowa legislature passed a statewide sales tax. and a state income tax. Democrats say the tax cuts should be targeted at Iowa workers rather than a general cut that would benefit the wealthy in Iowa and businesses. Republicans will pursue “broad tax reform,” according to Whitver.
âThe rich in Iowa work too,â Whitver said. “We want this to apply to every Iowan and that’s what we’ve done for the past five years is lower taxes for everyone.”
In 2018, Republican lawmakers passed a tax cut program that Democrats warned was fiscally irresponsible and would lead to underfunded schools and cutbacks in public services. âIt’s bobsled to the point of bankruptcy, that’s what they kept saying,â Whitver said. “In fact, the opposite is true.”
The state had a surplus of over $ 1 billion when the last fiscal year ended on June 30. Republicans say it should be returned to taxpayers. Whitver said getting rid of state income tax can’t be done in a year or two, but a lump sum income tax – without any deductions or credits – could be the first step.
âThat’s a good idea. It’s fair. People get that,â Whitver said. ââ¦ We have a tax code that’s a mess with credits and exemptions all over the place. We had to rectify that before we could. really take the next step.
Iowa State University economist Peter Orazem said this summer that if state income tax is eliminated, state sales tax would have to be significantly increased. He said that Iowa’s property tax rates are a bigger obstacle to economic growth than Iowa’s income taxes.