Sen. Tom Rielly’s Feb. 16 Column
Sen. Tom Rielly at Saturday's Eggs and Issues where they discussed the proposed 10 cent gas tax increase
In the Senate, we’ve unanimously approved a bill to give more than 260,000 Iowa households a boost in their state tax return, including the families of 37 percent of Iowa’s children.
Boosting the Earned Income Tax Credit (EITC) supports working families, places value on raising children and puts money into local economies. That’s why we made raising Iowa’s EITC our first priority for tax reform this year.
Senate File 2161 is a $54 million tax cut that increases Iowa’s EITC from 7 percent of the federal EITC to 13 percent in the 2012 tax year, 15 percent in 2013 and to 20 percent in 2014.
Republican and Democratic legislators and many experts agree that Earned Income Tax Credit is one of the best anti-poverty programs in the nation. Iowa is one of only six states that taxes families earning less than poverty-level wages, which is one reason the United Way of Iowa has made increasing the state EITC a high priority.
This tax cut will also help Iowa’s small businesses. When you cut taxes for struggling, working families, those dollars are spent locally on food, gas, car repairs, medical bills and other necessities.
Our next step should be to make commercial property taxes fairer, particularly for Iowa’s small businesses.
Senate File 522, approved by the Senate last session in a bipartisan vote, would do just that. The bill creates an on-going appropriation of $50 million per year, beginning with fiscal year 2014, for a Business Property Tax Credit Fund.
Each year that state revenues grow by at least 4 percent—something that has happened in 6 of the last 10 years—the deposit into the fund will grow by an additional $50 million. When the appropriation reaches $200 million per year, it will be maintained at that amount.
The Senate’s business property tax cut is fully funded with state dollars. There is no tax shift onto Iowa’s residential property taxpayers or impact on local schools and governments. That’s why local leaders prefer our Senate bill to the one approved in the House. The House bill would shift $357 million in property taxes to homeowners, according to Iowa’s nonpartisan fiscal bureau.
Under the Senate plan, all commercial property tax payers will receive a tax cut. When fully phased in, four out of five Iowa commercial properties (those valued at $390,000 or less) will be taxed at the same rate as residential properties, a tax cut of 41 percent.
