Generational tax reform for Iowa families small businesses

Upmeyer Column: Happy summer! In Iowa it nev-er seems like we get to enjoy spring or fall for very long. This year is no exception and the heat is already here. Here’s to hoping for cooler weather as the school year comes to an end and family vacations begin!
Last weekend we celebrated Memorial Day and took time to remember and honor those who gave their lives serving our country. We owe a debt of gratitude to these heroes and we can’t thank them enough. I hope you all were able to pay your respects to those we have lost and were able to spend some time with your families over the holiday weekend.
Late last year, Congress passed a historic tax reform package at the national level that will save Iowa taxpayers about $1.8 billion this year. However, these reforms have created an influx of new reve-nue for the state because we currently use federal deductibil-ity. Iowans won’t be able to deduct as much in federal tax-es, because they’re paying less, so their states taxes will actually increase as a result.
The state shouldn’t pocket this money to go on a spend-ing spree and grow govern-ment. Instead, we looked for a path to return it to taxpayers and reform Iowa’s tax code for the 21st century.
As the last days of the leg-islative session came to an end, we crafted a plan that provides true tax relief to Iowa families and small businesses, simplifies our tax code and makes it more competitive with other states, and ensures fairness for Main Street businesses. Perhaps most importantly, it does all of this in a prudent way so that our budget remains sustainable in future years.
So what does these mean for taxpayers in 2019?
• Iowans will see an average tax cut of about 10 per-cent
• 93 percent of middle class Iowans will see their taxes reduced
• Income taxes for Iowans will be reduced by $400 mil-lion
In future years, additional tax cuts and reforms will go into effect as early as 2023 as long as economic growth meets certain benchmarks. If those benchmarks are met, federal deductibility is eliminated, rates are lowered, and we go from nine individual tax brackets down to just four. These changes will dramatically simpli-fy the tax code and make it easier for Iowans to under-stand.
When fully phased in, the average family of four will see their taxes reduced by more than 25 percent! That’s real money that remains in their pockets.
This tax plan also moderniz-es our tax code to ensure fair-ness in today’s modern econo-my. Main Street businesses are often put at a disadvantage as our economy moves more to-wards internet sales and sub-scription services. Now is the time to eliminate this unfairness by requiring online sellers and internet-based services to begin collecting sales tax just as our brick and mortar retailers have done for decades.
Our tax reform package is a bold plan that provides signifi-cant relief to Iowa taxpayers, and it does so in a fiscally re-sponsible way. Our tax plan will allow us to continue mak-ing investments in key priori-ties like education, health care, our workforce, courts, and public safety programs. It also accounts for possible fluctua-tions in revenue by leaving a healthy surplus in future budg-et years.
This tax reform plan means Iowans will keep more of their hard-earned money and be able to use it in the best way they see fit. We trust Iowans who know how to spend their mon-ey better than government, which is why I was proud to vote in support of this bill.
As always, please keep in touch. Even though we have adjourned for the year, let me know if I can help in any way. During the interim, I would love to hear your ideas and feedback on this legisla-tive session and what you’d like to see accomplished next year. I can be reached by email at Lin-da.Upmeyer@legis.iowa.gov or by phone at (515) 281-3521.