Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

THEY'RE BACK, AND THEY NEED MONEY

January 14, 2008

The Iowa Legislature opens its 2008 session this morning. As the session starts, the big tax fights are likely to be over sales taxes and vehicle registration. The Quad City Times lists these tax issues among items likely to see action this year:

-- Road construction funding: The Legislature also will be looking at dealing with an estimated $200 million annual shortfall in funding for road construction and maintenance. Culver has ruled out the idea of raising Iowa’s gasoline tax, and legislators are likely to consider raising registration fees for pickups.

-- Statewide sales tax for schools: The Legislature will study ways to replace county-by-county local-option sales taxes used to pay for school infrastructure projects with a statewide penny tax.

Considering the budget pressues building after last year's spending spree, the legislature is likely to need still more money. While increases in income tax rates aren't likely, the insatiable spenders at the Capitol might grasp for "loophole closures" like a compulsive gambler grasps for an abandoned pile of chips. For example, the legislature might push for "combined reporting" for Iowa's highest-rate-in-the-nation corporation income tax.

Additional pressure to raise revenue will come from the endless push for tax loopholes for favored groups. A "young Iowan" advisory panel wants tax credits to pay their student loans, for example, and tax credits are sure to figure into plans for "universal health care."

Tags: Iowa tax policy.tax policy.

 • Eye on the Legislature, 2008       Bookmark: del.icio.us • Digg • reddit