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WHERE
IS THE GOVERNOR’S INCOME TAX REFORM BILL?
In early December, Governor
Vilsack publicly announced a very broad income tax reform plan. At
the time, Vilsack gave very few details, other than his plan would:
- Eliminate
federal deductibility on income taxes
- Eliminate the
tax on pension income
- Eliminate the
tax on Social Security income
- Collapsing the
current nine-bracket personal income tax to a four-bracket
system, due to the elimination of federal deductibility
- Eliminate
several sales tax exemptions
- Lower the
state sales tax from 5% to 4.5% or 4%
Shortly thereafter,
representatives from the Governor’s Office were asked for more
details and when a bill on the Governor’s plan for tax reform would
be available to the Legislature and the people of Iowa.
Interestingly, the Governor’s Office said that there would be no
bill, and legislators would probably have to “negotiate and work out
the details.” This is because the Governor “likes to throw out big
ideas”.
Since then the Governor’s
Office has shown little, if any, interest in negotiating the details
of the plan.
The only clue legislators
and the people of Iowa have as to the Governor’s intentions was
contained in an “issue brief” released at the end of January in his
budget for Fiscal Year 2006.
The “issue brief” on income
tax reform stated: “Over the past two years, Governor Vilsack and
Lt. Governor Pederson have made transforming Iowa’s economy and
providing greater economic opportunity to every Iowan a priority.”
Furthermore, the issue brief boldly stated “an impediment to further
growth and business expansion is the complex and cumbersome nature
of our state income tax.”
As the ninth week of the
Legislative session comes to a close, a bill from the Governor on
the “cumbersome state income tax” has yet to be sent to the
Legislature.
Ways
& Means Update
Bills introduced in committee this week:
No bills introduced in committee this week due to the
legislative funnel.
Bills passed out of
committee this week:
No bills
passed in committee this week due to the legislative funnel.
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