Iowa Republican senators are considering a proposal to reduce individual and corporate tax rates and eventually phase out the state’s already-limited inheritance tax. The plan would increase revenue by making more goods and services subject to the sales tax, but those provisions would be difficult to move through the legislature, and even if enacted, would replace a small fraction of the money our cash-strapped state stands to lose from the tax cuts.
Governor Kim Reynolds told journalists this week she won’t reveal specifics about her tax plan–a top priority for 2018–until she delivers her Condition of the State address on January 9. She indicated she is waiting to see how Congress amends the federal tax code.
However, Senate GOP lawmakers and staff have received a detailed set of proposals for review. Bleeding Heartland obtained a lengthy memo describing “the tax reform plan prepared for the Governor’s Office” and estimating the fiscal impact of those changes. As with pending GOP legislation at the federal level, the largest benefits would flow to the wealthiest Iowans.