Senate Democrat responds to Governor’s new tax plan

Senator Pam Jochum of Dubuque, lead Democrat in the Iowa Senate on tax issues, responded to Governor Kim Reynolds’s newly released tax plan. Senator Jochum noted that the plan does not address corporate tax credits — the fastest-growing part of the state budget — and raises other concerns.

Iowa Senate News Release
For Immediate Release:  February 13, 2018


DES MOINES — Senator Pam Jochum of Dubuque, the lead Democrat in the Iowa Senate on tax issues, responded to Governor Kim Reynolds’s tax plan.

Although the news release from the Governor’s office leaves many unanswered questions, Jochum raised two red flags about the plan:

  • “This plan does not touch corporate tax credits, which is the fastest-growing part of the state budget. That’s a big, big mistake and it’s unfair to working families.”
  • “Any tax cut plan for Iowa must be viewed in light of disastrous tax-cut plans approved in Kansas and Oklahoma, which have resulted in massive cuts to education, public safety, health care and other vital services. In fact, Kansas abandoned failed trickle-down tax cuts and Oklahoma’s Republican Governor is actually proposing higher taxes to dig her state out a fiscal mess in the wake of massive tax cuts.”

Last June, Jochum wrote a letter to Reynolds, offering to work with the Governor on a bipartisan tax plan.

“During your inaugural speech, you signaled that you planned to build on your experiences in the Iowa Senate and how you want to work together to make Iowa a better place. After a session marked by extreme legislation pushed through in a partisan manner, that will be a welcome change,” Jochum wrote to the Governor.

Even though the Governor never responded to the letter or reached out to Senate Democrats for their ideas, Jochum renewed her offer today to work in a bipartisan manner on a tax plan that meets these principles:

  1. Tax reform must be fair. Iowa’s tax system has a number of tax brackets in an attempt make the income tax system progressive so that those with lower incomes pay at lower rates. However, according to the Iowa Policy Project, when all state and local taxes are accounted for, Iowa’s lowest income earners pay the largest portion of their income in taxes. Changes to Iowa’s tax system should address this situation and not make this problem worse.
  2. Tax reform must make Iowa’s tax code more transparent so Iowa can show its true competitiveness to the nation. Iowa’s tax code has become a confusing collection of credits, deductions and exemptions that has left the state with high tax rates that do not accurately reflect the cost of living and doing business in Iowa. Our tax rates appear to be among the highest in the nation — but according to the Tax Foundation, the amount paid by Iowans through our tax system ranks Iowa in the middle of the pack.
  3. Tax reform needs to take into account our current budget situation. We just completed a legislative session where funding was slashed for nearly every part of state government, and there is no sign the situation will be improving next year. We must not repeat the mistakes of Kansas, which passed massive tax cuts that have resulted in a continual budget crisis where schools are underfunded and has forced the state to balance the budget by stealing from road funds and raising other taxes.
  4. Tax reform needs to examine corporate tax credits. We have cut state funding for vital state programs that serve some of our youngest and most vulnerable Iowans. So far corporate tax credits have been exempt from these cuts. We must determine if these corporate tax credits a good return on the investment and benefit Iowans, not just those few businesses.

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