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Federal tax deductibility repeal clears first hurdle; opponents rally tonight

March 31, 2009

The effort to repeal Iowa's individual deduction for federal income taxes cleared its first hurdle last night when HSB 284 was approved by the House Ways and Means Committee on a party-line vote.

The bill is touted as revenue-neutral, but it would increase the effective marginal rate for top-bracket Iowans from about 6.02% to 6.98%. Opponents are gearing up for hearings to be held tonight at the Capitol. Iowans for Tax Relief has launched an ad campaign to oppose the repeal bid. The Iowa Chamber Alliance, the coalition of chambers of commerce, has announced its opposition. Iowa Republicans are holding a rally against the repeal proposal at the Capitol tonight.

It will be interesting to see whether the Democrats will be able to hold their caucus together for this.

Links:

Des Moines Register coverage

Complete Tax Update coverage

Tags: federal deductibility.iowa tax policy.