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More on the push to eliminate federal deductibility

February 23, 2009

WCF Courier Online has more details on the effort of legislative leaders to repeal deductibility of federal taxes on Iowa returns. They say it's not a disguised way to increase taxes -- "for now":

Sen. Joe Bolkcom, D-Iowa City, chairman of the Senate Ways and Means Committee, said preliminary discussions are focusing on reducing the number of tax rates to as low as three, making it "revenue neutral" to state government by plowing the new tax revenue from ending federal deductibility into relief for Iowans making less than $200,000 annually. However, the income thresholds and revised tax rates remain in flux as more computer runs are made on possible options, he added.

It would be a lot more of a convincing effort at tax reform if they didn't say things like this:

"We would be looking at a scenario that would try to lower income tax rates for most Iowa taxpayers and make the system fairer and make the system simpler," Bolkcom said. "The most well-off Iowans are likely going to pay a little more."

Making it look like they really just want to raise taxes on somebody. If they wanted to make it look like real reform, they wouldn't be focusing on making somebody pay more; they'd be looking at what system would best finance the state budget needs at a low compliance cost without driving businesses and jobs from the state.

Legislative Democrats hint attacks on deduction for federal taxes
I've tried state corporation taxes, they're not worth it

Tags: federal deductibility.iowa tax policy.