Advocates and policymakers at the state and federal levels rely on ITEP’s analytic capabilities to inform their debates on proposed tax policy changes. In any given year, ITEP fields requests for analyses of policies in 25 or more states. ITEP also works with national partners to provide analyses of federal tax policy proposals. This section highlights reports that use ITEP analyses to make a compelling case for progressive tax reforms.
Iowa taxes its middle- and low-income families more as a share of income than it does wealthy families, a long-term trend worsened by the 2018 tax overhaul.
The latest “Who Pays” report by the Washington-based Institute on Taxation and Economic Policy (ITEP), again shows the effect of sales taxes and property taxes on lower-income households tilts Iowa’s overall tax system so the poorest pay the highest percentage in taxes.
As Iowa lawmakers consider the agreed-upon tax plan developed by Republican leadership and Governor Reynolds, sharp differences are clear from earlier proposals by the Governor and the House Ways and Means Committee.
IFP’s Tax Policy Kit offers resources for the public, advocates and policy makers who want to better understand the stakes — and sort away the spin — on state tax debates.
The tax bill that recently passed the Iowa Senate included a provision from the recent federal tax cut bill that provides preferential tax treatment for certain kinds of business income earned mostly by the highest income taxpayers. The “Qualified Business Income Deduction” (QBID) provides a 20 percent exemption of that income from the personal income tax.
Iowa’s General Assembly opened with promises from legislative leadership and the Governor for tax reform. We noted key opportunities to assure a fairer and sustainable system in a brief report last fall, “Introduction to 2018: What should be part of tax reform? And what should not?”[i] These options remain; some are gaining attention — such as the elimination of federal deductibility and the closing of sales tax loopholes — and some are not.
Governor Kim Reynolds’ tax proposal trades massive cuts in public services for small savings for lower-income taxpayers, larger savings for high-income taxpayers and few meaningful strides toward fairness in a system that already treats the poor poorly and raises too little revenue to avoid mid-year cuts.