Government

Reynolds: Dems want to increase taxes

Iowa Gov. Kim Reynolds signs the income tax bill, Senate File 2417, into law Wednesday in the offices of MobileDemand in Hiawatha. In Bettendorf on Thursday, she said Democrats who want to repeal the bill are seeking to raise taxes on Iowans.
Iowa Gov. Kim Reynolds signs the income tax bill, Senate File 2417, into law Wednesday in the offices of MobileDemand in Hiawatha. In Bettendorf on Thursday, she said Democrats who want to repeal the bill are seeking to raise taxes on Iowans.

BETTENDORF — With a general election looming, Iowa Gov. Kim Reynolds on Thursday accused Democrats who want to repeal the $2 billion income tax cut she just signed of seeking to raise taxes on Iowans.

The allegation is a preview of an issue that’s likely to play a major part in the campaign this summer and fall.

Reynolds was in Bettendorf on Thursday, the first stop on a swing through the state in advance of the June 5 primary.

The governor doesn’t have primary opposition, but with media and public attention focused on the five Democrats seeking the party’s nomination to run against her, the tour is a chance to engage and motivate her supporters.

At Happy Joe’s Pizza & Ice Cream, the governor told about 35 people she isn’t buying into the idea of a “blue wave” of Democratic voters this fall.

“I said, ‘Watch out, there’s a red wave coming,’” she said.

Afterward, Reynolds said talk of repealing the income tax cut, which she signed into law on Wednesday in Hiawatha, amounts to wanting a tax increase.

“What that means is they’re in favor of raising Iowans’ taxes, and I’m not,” she said.

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Some of the Democrats running for governor have called for repeal of the tax cut. But front runner Fred Hubbell has not, saying it has some good parts.

However, he has criticized the package overall and said he would have vetoed it.

That position has produced criticism from John Norris, a rival for the nomination, who has accused Hubbell of equivocating on the issue.

Asked whether Hubbell deserves any credit for saying that he would not repeal the tax cut, the governor echoed Norris’ criticism.

“Well, he was back and forth, back and forth,” she said Thursday.

A spokesperson for Hubbell’s campaign, Remi Yamamoto, said Thursday the candidate has been “very clear.” She said the tax cut is “fiscally irresponsible,” but if Hubbell were to become governor, “he would not approach it with a purely partisan lens and would look to keep certain pieces that may be working for Iowans — like eliminating federal deductibility and leveling the playing field for Main Street businesses with (sales taxes on) internet business.”

Republicans backing the state tax cut have argued without taking action this session. The federal tax cut approved last year would have caused Iowans’ tax liability to rise.

Critics, though, say the package went too far, favoring the rich and exacerbating the state’s budget difficulties.

Reynolds said Thursday the tax cut would help people in all brackets.

“I understand what it’s like to try to make a budget and make ends meet with a small family,” she said, noting she and her husband worked different shifts to earn money when they were young and had a growing family.

“If I would have got $10 in a paycheck, that’s $10 that could go to a lot of different things. It’s our money ... that tax cut was my pledge to them that we’re going to help you keep more of your hard-earned money,” Reynolds said.

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An Iowa Department of Revenue estimate in early May said the average Iowan would get a $255 income tax cut for 2019 but that those up the income scale would see bigger savings.

Iowans with incomes between $50,000 and $60,000 would save $152 on average, while those making $1 million or more would save an average of $18,773. Iowans making between $200,000 and $250,000 would save an average of $934.

The biggest percentage cuts for 2019 would be for those making between $10,000 to $20,000, followed by Iowans making between $500,000 and $1 million, according to the estimate.

The average income tax cut would be about 10 percent.

Those figures don’t reflect the extra state sales tax Iowans will be paying on certain online purchases.

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