Wednesday was a difficult day for The American Independent News Network, which is the larger entity that operates The Iowa Independent. Our chief executive and founder announced two of our sister sites would close and their content would be moved to The American Independent.
A recently introduced bill could have far-reaching impact on the U.S. sugar industry, including American Crystal Sugar, a farmer-owned cooperative that locked out 1,300 Midwest workers on Aug. 1.
The chairman for Herman Cain’s Iowa effort says the campaign “relied more on the word of farmers than Washington regulators” in deciding to run an ad containing claims the Environmental Protection Agency says are false.
The Iowa Senate will remain under the control of a slim 26-25 Democratic majority when it reconvenes in January 2012.
Legislation lowering each of Iowa’s nine individual income tax brackets by 20 percent passed the Iowa House Wednesday night, a plan which would eventually cost the state more than $700 million in annual revenue.
House File 194 takes the current individual income tax rates — which range from 0.36 percent to 8.98 percent — and reduces them to a range of 0.28 percent to 7.18 percent. The cut would cost $330 million in revenue in the 2012 budget year. In the following three budget years, it would cost $704 million, $711 million and $750 million.
“Iowans know best how to spend their money and the government has too much of it,” said state Rep. Tom Sands (R-Columbus Junction). “This legislation is long overdue and is one of the best things we can do to put Iowans back to work.”
Democrats took a different view, pointing out that Republicans are pushing numerous tax cuts at a time when they say there is no funding available to save services like universal preschool. Gov. Terry Branstad on Monday rolled out a preschool plan that cuts funding from the current $90 million level down to $43.6 million. Republican legislation passed by the Iowa House last month aims to cut $500 million from the state budget over three years by eliminating universal preschool, making funding cuts at the higher education level, cutting funding for family planning services, eliminating a state-funded smoking cessation program and eliminating funding for passenger rail.
“Republicans voted down a plan offered by House Democrats to keep 20,000 Iowa kids in preschool and provide more help for middle class families,” said state Rep. Dave Jacoby (D-Coralville) “Instead, House Republicans have chosen an irresponsible $700 million plan that rewards the wealthy while leaving the middle class and our kids behind.”
The Iowa Fiscal Partnership, a nonpartisan budget and tax policy think tank, analyzed the tax-cut legislation and determined the vast majority of benefits go to the wealthiest Iowans.
“While the bottom one-fifth of Iowa taxpayers see their overall taxes (sales, property and income combined) reduced by about 1.6 percent, the top 1 percent see their overall tax burden reduced by about 9.3 percent,” the group said in a statement. “Further, a disproportionate share of those in the top 1 percent of income are out-of-state tax filers who made profits in Iowa and they (or their home states) would be big beneficiaries of such cuts.”
A study of a previous 10 percent across-the-board income tax cut that was passed in 1997 found that because of an earlier increase in the sales tax, 80 percent of the state actually paid more taxes after the income taxes were lowered. The tax burden in Iowa was shifted down, with the poorest fifth of Iowa non-elderly taxpayers paying 11 percent of their income in state taxes and the wealthiest Iowa taxpayers, with income averaging $989,200, paying only 7.4 percent.
The Iowa Fiscal Partnership suggests scrapping the tax cut proposal to instead double the Earned Income Tax Credit, arguing that in addition to costing a fraction of HF194, it would also provide much greater benefit to 70,000 working low- and moderate-income families with children.
In addition to the 20 percent tax cut, Republicans are also considering cuts to the state’s corporate income tax and commercial property taxes.
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