A Bold Proposal
Gov. Kim Reynolds wasted little time in Tuesday’s Condition of the State Address in laying out a bold idea for individual income tax reform in Iowa…a flat 4 percent tax.
As always, the devil is in the details…are there some folks who would actually pay more according to her plan, for example…but I love the fairness of the concept.
I have never agreed with those who say those who make more money should pay a larger percentage of that income in taxes than someone else. Pay more dollars in taxes? Sure. But why should a person pay 6 percent instead of, say, 5 percent, just because they make more? Seems to me that the percentage should be the same.
But that’s not popular with the “soak the rich” folks, who apparently want to punish success. The key to so much of this is how many deductions you allow. Having a top percentage at 6, 10, or 15 percent…but allowing a lot of deductions…is worthless, because the net effect is the same as someone who makes less and doesn’t have the benefit of deductions to lower their tax bill.
I’m oversimplifying this, but not by much…as someone who used to prepare income taxes for a living, I have some experience with this.
I like reducing income tax and allowing folks to adjust something like the sales tax…it’s in essence a user fee that way. Exempt food as we do now, but why not tax consumption generally, just as we do certain things like cigarettes and alcohol.
I’d really love to see reduced property taxes, but the last time the state tried to encourage counties to do that by providing “backfill” money, counties still played around and property owners who thought they’d get a break were disappointed.
Again, lots of details in all of this…but at least now there’s a proposal on the table as of day 2 of the session…plenty of time to review, discuss, and modify. And maybe—just maybe—help citizens. What a concept.
