News Flash: Democrats may redo state income tax system

Democrats in the Iowa Senate say they may push through a massive overhaul of the state's income tax system and junk the practice of allowing Iowans to deduct their federal tax bill from their income before calculating their state income taxes.  More on this later.  Read the full Radio Iowa story.  (There is a 27 minute mp3 at the end of that page — it's the entire audio from the news conferences Democratic, then Republican leaders had this morning at the statehouse.)

UPDATE:  Iowans for Tax Relief, the organization which has fended off every previous attempt to get rid of this tax calculation, fired off a news release late this afternoon.  Read it below.

Iowa Senate Democrats Propose Elimination of Federal Deductibility
MUSCATINE, IA-Today Iowa Senate Democrats held their weekly press conference and Senate Majority Leader Mike Gronstal (D-Council Bluffs) told members of the press they are debating a measure to eliminate federal deductibility this year.

Senator Gronstal said today, "Clearly federal deductibility is a gigantic benefit to the wealthiest Iowans and some mechanism that would move away from that, simplify our tax code and give a break to middle class families is something that we're very much interested in."

Ed Failor, Jr., President of Iowans for Tax Relief issued the following statement:

"Senator Gronstal obviously has lost touch with the average Joe and doesn't understand who this really hurts. Eliminating federal deductibility in Iowa hits lower and middle income Iowa renters the hardest.These folks are working hard to get ahead, and Senator Gronstal wants to take away their largest tax deduction.

"Additionally, to suggest a tax increase as a solution to simplify the tax form is an insult to all hard working Iowans.

"Federal deductibility allows Iowa taxpayers to deduct their federal taxes paid on their Iowa income taxes.Federal deductibility protects Iowans from paying a tax on a tax. In a recent poll 72.5% of Iowans oppose the elimination of federal deductibility.Apparently the voices of nearly three quarters of Iowans are irrelevant to Senator Gronstal.

"As Iowans are preparing their tax documents, they see the benefit of deducting their federal taxes paid on their state income tax form.We have worked for over 30 years to protect federal deductibility and we will continue the fight to protect Iowans from this major tax increase."

More details on federal deductibility are on our website at, and will be in the "Watchdog" tomorrow.

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About O.Kay Henderson

O. Kay Henderson is the news director of Radio Iowa.