State lawmakers return to the capitol today, starting another week of negotiations within the Republican party over how much to cut state income taxes.
The GOP-controlled House and Senate last week unveiled updated and competing tax plans.
House members call their tax cut bill “significant but responsible,” while the Senate’s is, in their words “bold but prudent.”
Under the House bill, the average individual income tax cut would reach nearly 9 percent. The bill would cost $1.3 billion over five years.
House Speaker Linda Upmeyer said the House “tweaked” Gov. Reynolds' tax plan.
The Senate’s new bill significantly scaled back an earlier proposal that passed the Senate on a party-line vote. The original bill would have cut taxes by more than $1 billion a year.
The new Senate bill cuts income taxes immediately by 8 percent, for an eventual cost over five years of $2 billion.
Sen. Randy Feenstra (R-Hull), chairman of the Senate Ways and Means Committee, is not concerned that expense accounts for lawmakers run out on Tuesday, the official last day of the session.
“As of Tuesday I'm on my own dime so the taxpayers don't pay after Tuesday,” Feenstra said. “So the
bottom line is I want to make sure Iowa taxpayers get a significant reduction and that we can grow our economy.”
“Our bill is a little more cautious,” said House Ways and Means Chairman Guy Vander Linden (R-Oskaloosa).”
The Senate includes corporate tax cuts while the House does not. The Senate also eventually gets rid of federal deductibility, the ability of Iowans to deduct their federal tax bill from their state taxes.
House members say they did not eliminate federal deductibility because of the cost.
“We always get these things worked out and we will,” Vander Linden said. “As to the mechanism I hope it can be done quietly with conversations without having to go to a conference committee, but if that's what it takes that's the way we'll do it.”
The House bill would reduce state revenues by $300 million over the next two years. According to a one-sheet description of the Senate plan, Iowa taxpayers would keep $733 million over the first two years.
The House plan advanced through the Ways and Means Committee last week, in spite of united opposition from Democrats.
"After Republicans just raised tuition, made millions in budget cuts, and put $144 million on the state's credit card, Iowans should be skeptical of any GOP tax scheme that costs $300 million," Rep. Dave Jacoby (D-Coralville) said in a statement.