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At least one lawmaker wants to drag Iowa's tax law in the right direction

January 19, 2012

Mark Chelgren of Ottumwa has proposed SF 528. From its explanation:

This bill rewrites the state individual income tax by creating a flat tax structure and imposes a single rate of 6 percent on the taxable income of every taxpayer subject to the individual income tax.
The bill creates a flat tax structure by eliminating most of the deductions and exclusions previously available when computing net income and taxable income for Iowa tax purposes and by eliminating the alternative minimum tax.

The bill provides for a standard deduction equal to $1,000 for each personal exemption the taxpayer is allowed to take under the federal Internal Revenue Code.

It would be a big improvement, but it could be more ambitious:

The bill retains the current tax credits available under the individual income tax with the exception of the minimum tax credit.

Why? We couldn't get by without three venture capital fund tax credits? Yes, it would be a big improvement over what what we have now, but we can do better!

Tags: Iowa tax policy.Mark Chelgrin.Quick and Dirty Iowa Tax Reform.SF 528.