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State Government News

Democrats want to expand Iowa's child care and earned income tax credits

house minority leader jennifer konfrst speaks in the Iowa House
Madeleine King
/
IPR
House Minority Leader Jennifer Konfrst says Democrats want to expand two tax credits to help working Iowans.

Democrats in the Iowa House and Senate proposed their own tax plan Thursday that they say will benefit working and middle-class Iowans.

It’s the minority party’s response to the Republican proposals that would phase in a flat personal income tax, cut corporate taxes, rework business credits, and eliminate taxes on retirement income.

“Democrats believe we need a fair tax system, not more Republican tax schemes,” said House Minority Leader Jennifer Konfrst, D-Windsor Heights. “That means we’re ensuring there are…no new tax giveaways to corporations, no new tax giveaways to millionaires, no new tax giveaways to special interests.”

She said Democrats want to increase the amount of the Child and Dependent Care Tax Credit, which is currently available to taxpayers making up to $90,000 a year. They also want to remove the “cliff effect” for the credit, by allowing people to phase out of receiving that credit as their income increases.

The second part of their plan would double the Earned Income Tax Credit for low-income Iowans. According to Konfrst, a single mom with three kids and working two jobs could get an additional $6,660 each year.

Senate Minority Leader Zach Wahls, D-Coralville, said the plan “rewards work, not wealth.”

“We believe that we need to support Iowa workers who are the backbone of our economy with lower costs and tax cuts rather than what Republicans want to do, which is supporting the super rich and corporations who continue to get richer while Iowans get left behind,” he said.

Democrats say they don’t yet have an estimate for how much these changes would cost the state.

Because Democrats are the minority party and don’t have control over the lawmaking agenda at the Iowa Capitol, they plan to introduce these proposals as amendments to the Republican tax plans.

House Speaker Pat Grassley, R-New Hartford, was asked about the Democrats’ proposal. He said the legislature expanded eligibility for the Child and Dependent Care Tax Credit last year.

“At this point, I think our focus is going to continue to be on the personal income tax side along with those two retirement pieces from the governor’s bill,” Grassley said.

Gov. Kim Reynolds said her tax plan will make the state more competitive, and that Iowans having more money in their pockets from her tax cut plan will help fuel economic growth.