DES MOINES — House Speaker Linda Upmeyer is taking a cautious approach to a Senate plan to repeal the state inheritance tax.
Her concern with Senate File 307 is that repealing the inheritance tax could jeopardize the $2.86 billion tax relief plan the Legislature approved in 2018, the Clear Lake Republican said Thursday.
“I want to make very sure that we don’t put that ahead of the tax bill we did last year that addresses middle-class income tax,” Upmeyer said. “If we do something that gets ahead of that and doesn’t allow the triggers to go into effect, that would be the wrong thing to do. I want to make sure we are enacting what we did last year before we do something new.”
The 2018 tax bill uses triggers to protect budget sustainability in future years, ensures full repayment of the cash reserve fund this year and does not reduce the property tax backfill to cities and counties. The triggers are based on reaching or exceeding an annual net general fund tax receipts of 4 percent. The plan included an example of tax receipts valued at $8.314 billion for fiscal 2022.
“I would have to be pretty confident that the triggers were going to kick in before I get very excited about” repealing the inheritance tax, Upmeyer said.
The inheritance tax is a “plunder tax ... death tax ... one of the most abhorrent taxes we have,” according to Sen. Jake Chapman, R-Adel, sponsor of SF 307.
According to him, the state is collecting about $90 million a year “from the grave.”
At a subcommittee hearing on SF 307, Senate Ways and Means Chairman Randy Feenstra, R-Hull, said the inheritance tax is a disincentive to economic growth, particularly in farming.
ARTICLE CONTINUES BELOW ADVERTISEMENT
However, repealing the inheritance tax at this time could “jeopardize the income tax relief” and “that would not be something I would want to do,” Upmeyer said.
A House plan to allow voters to petition for a reverse referendum if city and county property taxes increase more than 2 percent a year “is on my wish list to get done this year,” she said, referring to House Study Bill 165.
l Comments: (319) 398-8375; firstname.lastname@example.org