Des Moines, Iowa — Tax negotiations among key Republicans at the Iowa Capitol appear to have yielded a final plan.
Senate Majority Leader Jack Whitver spoke with Radio Iowa after meeting with his fellow Republicans in the senate early Thursday morning.
Whitver said the final version making its way through the legislature hews closely to the plan Republican Governor Kim Reynolds unveiled on January 11. It shrinks Iowa’s personal income tax rate to a single rate within four years.
The plan will erase the income tax on retirement income and it will reduce the corporate income tax. The final deal also reduces a handful of refundable tax credits, including the research activities tax credit that yields refund checks for some corporations.
Whitver says the plan does not eliminate tax credits, but in some cases will reduce a corporation’s ability to use the credit to eliminate it’s entire tax liability and wind up getting a refund check from the state.
Last year, the state issued 44 million dollars in tax refund checks to a small group of corporations that claimed the state’s research activities tax credit. Last June, the governor signed a bill that cut personal income taxes, eliminated the inheritance tax and got rid of a property tax levy. Senate Republicans estimated it would reduce state tax collections by one billion dollars over eight years. Early estimated indicate the plan to be voted upon today be far larger.
On Tuesday night, Governor Kim Reynolds is scheduled to deliver the Republican response to President Biden’s State of the Union speech. Action on the tax plan means she’d be able to mention it in her remarks.
