District 39 State Senator Kevin Kinney (D) has qualms with Republicans’ proposals for a flat income tax which would eliminate Iowa’s progressive income tax structure. 

Governor Reynolds and the House are proposing a 4% tax to be phased in over four years, while the Senate is proposing 3.6% and to establish a mechanism that could eventually eliminate income taxes altogether. The average family would save over $1,300 in taxes by the time the cut is fully implemented in 2026, according to the governor’s office. Senator Kinney says this plan would favor those with higher incomes who currently pay as much as 8.53%, “The problem with the way the governor has got this written is that there is going to be no tax credits that are going to be looked at. People that are currently getting tax credits are going to be paying less in taxes at four percent and are beginning to receive a much larger tax dip than those that are currently paying at a four percent tax rate. And they’re not going to have those tax credits to help with those tax obligations.”

House and Senate Democrats have proposed their own tax plan in response to the Republican proposals that would also cut corporate taxes and eliminate taxes on retirement income. Democrats seek to increase the amount of the Child and Dependent Care Tax Credit and double the Earned Income Tax Credit for low-income Iowans. They plan to introduce their proposals as amendments to the Republican tax plans.