Democrats in the Iowa Legislature today proposed an end to federal deductibility — it's a tax break for Iowans which allows taxpayers to deduct their federal tax bill from their income before calculating their state income taxes . Critics say that credit artificially inflates Iowa's top tax rate when compared to other states (Louisiana is the only other state which has this tax break Iowa is one of only four states which has this tax break). The top tax rate under the Democrats' proposal would be 6.98 percent.
Democrats say their plan will cut or keep taxes the same for two-thirds of Iowans — a middle class tax cut (middle class defined as those who earn $125,000 or less). Republicans say it's a step in the wrong direction.
Democrats first suggested this was being seriously considered back in February.
UPDATE: Here's a preliminary the final version of the Radio Iowa story.
UPDATE II: Click on that link above and now you can listen to today's news conferences featuring Democratic and Republican legislative leaders.
About O.Kay Henderson
Kay is a founding member of the Radio Iowa network newsroom. In 1994, she became the network’s news director. She’s a featured reporter and commentator on Iowa Public Television’s “Iowa Press,” and the 2002 recipient of the Shelley Award.
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