DES MOINES — Credit unions, ride-sharing companies and policy groups are scheduled to testify this evening at a public hearing on Gov. Kim Reynolds’ tax relief and reform plan.
The Iowa House will have a hearing beginning at 5 p.m. in Room 103 of the Capitol to listen to members of the public comment on House Study Bill 671.
The House Republicans’ bill is based on Reynolds’ proposal to cut state income taxes by $1.7 billion by 2023 while maintaining expected growth rates in revenue.
In addition, her plan includes “triggers” that the governor said will act as safeguards in the event of an economic downturn. In the event of significant economic growth, the triggers will accelerate tax cuts to return more money to Iowans.
However, it’s not the only plan under consideration at the Capitol. Senate Republicans have a sweeping tax-relief plan they say will cut individual and corporate income tax rates more than $1 billion a year beginning in 2019, reduce the number of tax brackets and expand the sales tax base by capturing more online transactions.
Their plan, called the Iowa Working Families Tax Relief Act, seeks to eliminate the federal deductibility feature in favor of cutting personal income taxes by 30 percent over a two-and-a-half year period.
Iowans in the $45,000-a-year income range could see an average yearly tax cut of $1,000 beginning with the 2019 tax year, while Iowans in the top income bracket could have a reduction of about $4,000 annually, Senate Republicans said.
Unlike the governor’s plan, the Senate Republicans’ plan includes corporate tax changes. It would reduce the current four brackets to two with rates of 7 percent and 5.5 percent, providing about $240 million in relief over five years.
Another feature seeks to create balance among financial institutions by treating banks and credit unions the same and subject to similar tax provisions. That, not surprisingly, has drawn praise and criticism from banks and credit unions, respectively.
“Any tax on a credit union is a tax on me as a member,” Kathy Johnson pf the Linn Area Credit Union said in comments submitted ahead of tonight’s hearing.
“The Senate tax reform bill raises taxes on 20 credit unions and over 600,000 Iowans, which is the opposite of tax relief,” added Ashlee Cooper, another Linn Area Credit Union member.
Karl Schilling of Iowa United Professionals/United Electrical Workers found some “good elements” in the bill but said its overall effect would be a hardship on Iowans.
“Racked with budget shortfalls already, this bill will ensure that our budget problems will get even worse, especially if Iowa is also the victim of a trade war,” he said.
Nearly 100 people are signed up to speak at the hearing. The number of pro and con speakers is roughly equal. At least 15 of the speakers represent credit unions.
Also, Ron Corbett of Cedar Rapids, who until recently was a candidate for the Republican nomination for governor, is registered to speak on behalf of Engage Iowa.
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