Tuesday, April 14, 2009

Democrats Strengthen Plan for Middle Class Tax Cuts

The debate to end federal income tax detectability is back on the schedule this week in the Iowa Legislator. Democrats have revised their original plan after hearing from opponents and have strengthened the middle class tax cuts.

Here is information that I received from my State Senator over the weekend...

The middle-class tax cut will:

Lower taxes

o Tax rates will fall for all Iowans.

o Taxes will be cut for more than 60 percent of taxpayers in our area.

o The overall tax cut totals $55 million.

o More than 881,000 Iowans will see their standard deduction increased by nearly $1,000.

o Nearly 75 percent of Iowa taxpayers – almost 1 million households – will either have a tax cut or no change at all to their taxes.

Be better for families

o Iowa families will benefit from an increase in the child and dependent tax credit.

o Iowa households will benefit from an increase in the elderly and blind tax credit.

o Iowans will benefit from an increase in the Earned Income Tax Credit.

o Iowa college students will benefit from a new $100 refundable tax credit.

Make Iowa more competitive

o Iowa’s tax rates will be more competitive for economic development and job creation.

o Iowa’s highest tax rate will be reduced by 22 percent.

A key to this plan to end federal income deductability is to lower our state income tax rates, which would make Iowa more attractive to out of state companies looking to locate here. Right now companies look at the tax rates and see Iowa with much higher rates than surrounding states. Ending federal income tax deductability improves Iowa's business climate.


Imee said...

Hmm. If this push for tax cuts will happen, I think it's gonna be a good thing for the state of Iowa. Stuff like the EITC and others could make a big difference for many people out there.

ZoomProspector said...

Reducing tax rates will be a great benefit to Iowans. Did you know that BusinessWeek recently named Ames the best city in Iowa to start a business?


They use ZoomProspector data to determine this list-- here is the Ames profile page on ZoomProspector: