Iowans for Tax Relief and Tax Education Foundation will work for these four pro-taxpayer priorities in this session and ask Legislators to work with us for all Iowa taxpayers. Tax Education Foundation is working to educate you on these current topics.
•Environmental groups and some Legislators are pushing to raise the state’s six-cent sales tax by an additional 3/8 of a cent with the revenue raised by the increase going to the trust fund established in the 2010 Constitutional Amendment, the Natural Resources and Outdoor Recreation Trust Fund. Supporters claim this additional revenue is needed to improve water quality in Iowa. However, the DNR’s own report on the Trust Fund states “Iowa’s precious water resource can be positively affected by five to six of the funding vehicles [established by Iowa Code for the Trust Fund] allocating up to 60% of the new funding toward that resource in some way.” Only 6 of every 10 new dollars raised by the imposition of the increase in sales tax would likely go toward water quality. Hardworking Iowans are now paying more at the pump with last year’s fuel tax increase; they should not have to endure another tax increase this year.
•Governor Branstad has proposed extending the one cent of the state’s sales tax that goes to the Secure an Advanced Vision for Education (SAVE) Fund, currently set to be repealed in 2029, by an additional twenty years and diverting some of the revenue toward water quality projects. The SAVE Fund is used by Iowa’s school districts for infrastructure purposes or property tax relief. Instead of taking more tax dollars from Iowans, those who are responsible for polluting Iowa’s water should bear the cost of the clean up.
•Federal Deductibility must be protected. Your right to deduct all your federal income tax payments on your Iowa income tax return is an essential principle of fairness: no tax on a tax! Iowans for Tax Relief has always made protecting federal deductibility a top priority because it would be wrong for the state government to tax you on money which was used solely to pay your federal income taxes.
•Iowa should exempt all retirement income from the state’s income tax. Iowa currently exempts Social Security benefits, military retirement benefits, and certain railroad retirement benefits. For other retirement income, a taxpayer meeting certain criteria is able to exclude up to $6,000 in retirement income from taxation ($12,000 if filing jointly). Completely eliminating this income tax burden may encourage more retirees to remain in Iowa. Data from the Tax Foundation indicates that “the majority of private-sector retirement income ($485 billion out of the $843 billion) [in the U.S.] goes to people making less than $100,000 a year.” Eliminating this tax burden for retirees in our state would benefit mostly middle-class Iowans.