Iowa Democrats call for tax credit boosts in tax plan
Iowa Democrats unveil their tax plan that, if passed, would increase tax credits for low- and middle-income Iowans.
House Minority Leader Jennifer Konfrst, D-Windsor Heights, speaks during the opening of the 2022 Legislative Session at the Iowa State Capitol in Des Moines, Iowa, on Monday, Jan. 10, 2022. Konfrst addressed the workforce crisis in Iowa. “And honestly, let’s imagine a young family deciding whether to move to Iowa for good jobs or some other state in the Midwest,” Konfrst said. “Will we create a state where they can find affordable childcare, where they have access to quality health care, and quality affordable housing?”
February 3, 2022
Iowa Democrats unveiled what they’re calling the Fair Tax Plan, which Democratic leaders say will aim to bring money back into the pockets of working class Iowans.
“As we’ve said several times, Democrats believe we need a fairer tax system, not more Republican tax schemes. That means we’re ensuring there are no corporate tax giveaways, no new tax giveaways to corporations known in tax giveaways to millionaires, no new tax giveaways to special interests,” House Minority Leader Rep. Jennifer Konfrst, D-Windsor Heights, said during a press call on Thursday.
Democrats aren’t proposing directly cutting income tax rates, but instead boosting tax credits to ease the tax burden on low-income Iowans.
Democrats say the plan would lower income taxes for the middle working class by increasing the child and dependent care tax credit, which is available to any Iowan making less than $90,000 a year. The plan also calls for increasing the Earned Income Tax Credit, which is available to low- and middle-income taxpayers.
“These are the themes and the overarching ideas and proposals that we in the House and the Senate have agreed to and those will be working their way through the Ways and Means process, as represented by several different amendments that will be presented in both committees and on the floor,” Konfrst said.
The Democrats’ proposal would improve workforce issues and help working class Iowans, said Senate Minority Leader Zach Wahls, D-Coralville.
“The tax plan that we are unveiling is just one piece of our overall plan to help Iowans recover from the Reynolds workforce crisis,” Wahls said. “We know that Iowans are hardworking people who take pride in our work, but fewer Iowans are working today than when Governor Reynolds took office because Republicans are driving workers out of our state and are unable to keep Iowans in the workforce.”
While the Iowa Democrats, the minority party, are working on their tax plan, so are Iowa Republicans.
Republicans in the Iowa Senate propose setting tax rates to 3.6 percent over the next five years, a tax cut for most Iowans. The plan would also scale back the corporate tax rate, and eliminate retirement income tax.
Gov. Kim Reynolds and House Republicans are proposing reducing individual income tax to a flat tax of 4 percent by 2026.
“If passed, Gov. Reynolds’ currently proposed tax bill will move Iowa’s income tax rate from one of the highest to the 5th lowest in the nation. Gov. Reynolds’ tax bill encourages corporate investment in our state to help accelerate economic growth and sends a message to the country that Iowa is open for business,” stated in a press statement from the governor’s office.
According to Konfrst, Republicans want to give tax cuts to the wealthy, not to the working class of Iowa.
“We want to give middle class Iowans a tax cut, not millionaires and billionaires. We want to invest our state’s surplus into expanding apprenticeships, Career Training and Technical Education which will help solve the Reynolds workforce crisis,” Wahls said.