How Will You Spend Your Huge Tax Savings?

Video about the Kansas experience. Note the similarity to Iowa’s new tax scam. About 4 minutes

I can almost not contain my excitement! Wednesday, Kim Reynolds signed that giant tax cut into law! Holy Moly I’ll have more money every week.

I am so excited. Boy-oh-boy it looks like I am going to get around $4 a week. What to do, what to do with this windfall? A cup of coffee? Maybe a liter of soda? A gallon of gas? Maybe save up all year and buy a month of heat next winter? Or a month of electricity? I’d better do something or inflation will eat it up and more before I even see it.

Maybe the theater will let me watch 4/5th of a movie and then throw me out just before the end?

While Iowa’s Republicans try to sell us that their tax cut is a great thing for all Iowans, the truth is that the tax cut is only good for you if you are in the top 2.5% of Iowa earners. By my calculations that is about 75,000 Iowans. They rest of us are pretty well out of luck. Most of our so called tax cuts will be eaten up by inflation.

When it comes to matters fiscal I go to the Iowa Policy Project or one of their subsidiaries for a reality check. So at Peter Fisher clears out the the cloudy haze that hides the truth. The opening paragraphs sure lay waste to the Republican hype:

Here are five things you need to know about the final version of the tax bill now scheduled for a vote in the Iowa Legislature this Saturday: (1) It is not income tax reform, (2) It is not a middle-class tax cut, (3) It is more skewed to the richest Iowans than previous bills, (4) It is very expensive and will force cuts in education, public safety and other services, and (5) It is more likely to hurt the Iowa economy than to help it.

As we have pointed out previously, real income tax reform would rein in expensive business tax credits that have little effectiveness, eliminate federal deductibility, increase recognition of the costs of raising a family, and raise the Iowa standard deduction — which would both simplify taxes for thousands of Iowans, and target tax cuts at lower and middle-income taxpayers. The tax bill does none of these things for the next four years.

We then skip to Fisher’s final paragraph where he lays waste to one of the Republican’s major arguments for the tax cut – growth:

If the bill’s backers are counting on growth to come to the rescue, they are willfully ignoring all evidence to the contrary. The last major income tax cuts in Iowa, in 1997-98, not only failed to stimulate growth, but likely contributed to the subsequent slowing of the state’s economy. The tax cuts in Kansas led to slower growth.

Let’s go to a statement from Matt Sinovic of Progress Iowa issued Wednesday following the signing:

For Immediate Release: May 30, 2018

Contact: Matt Sinovic, (515) 423-0133

Statement: Reynolds Signs Republican Tax Scam Into Law

Hiawatha, Iowa — Progress Iowa Executive Director Matt Sinovic issued the following statement in response to the Governor signing into law today Senate File 2417, the Republican tax scam that will deepen the Reynolds Budget Crisis:

“The Governor just gave billions away to millionaires who don’t need it with money that we don’t have.”

“The vast majority of Iowans are opposed to this plan, and would much rather have public services paid for than receive a tax break of a few hundred dollars for themselves.”

“It’s no wonder then that this bill was written in private, without public input. The Governor knew it would deepen the Reynolds Budget Crisis that has forced the legislature to slash funding in the middle of the past two fiscal years. And she knew this could lead to a secret tax hike, as any potential tax decrease could be offset by local property tax increases when Republican legislators refuse to continue backfill payments.”

“Iowans get it. We know that money Reynolds and Republicans give to millionaires could be put to use in classrooms, repairing roads, nursing home inspectors, adequate oversight at DHS, and making sure we have clean drinking water. We get it, and we’re not going to fall for the Republican tax scam signed today by Governor Reynolds.”


Background Information

Iowa Fiscal Partnership: Tax plan facts vs. spin

Iowa Policy Project: Tax bill: Know five points

Quad City Times:  Fund services rather than tax cuts, Iowa poll finds

Iowa Fiscal Partnership: 2018 Tax Policy Kit

Associated Press: Tax cuts for typical Iowa family could yield $7 a paycheck

Des Moines Register: Iowa’s fixer-upper tax code remains behind closed doors

Mason City Globe Gazette: GOP senators seek to end state payments

About Dave Bradley

retired in West Liberty
This entry was posted in Blog for Iowa, Iowa legislature 2018, Iowa Policy Project, Republican hypocrisy, Republican Policy, tax cuts for the wealthy. Bookmark the permalink.