Taxes

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Finance managers in the Iowa House and Senate say it is costing taxpayers tens of thousands of dollars for the legislature to remain in session past its April 17th adjournment date.  

Those costs are expected to rise as the session may continue well into next week, even once House and Senate GOP negotiators reach agreement on taxes and budgets. 

Chief House Clerk Carmine Boal explains that lawmakers’ expense accounts expired on April 17th, the scheduled 100th day of the session, so they are no longer being paid per diem. 

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Rank and file lawmakers adjourned for the week and went home today, leaving behind key negotiators to work out a tax deal so the 2018 legislative session can come to a close. 

There is broad agreement among Republicans in the House, the Senate, and the governor’s office that income tax cuts are needed so Iowans can take full advantage of federal tax cuts.   Each of their plans provide additional tax relief beyond that, while the Senate plan cuts taxes most aggressively of the three.

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Republicans and Democrats sparred today over GOP plans to cut income and other taxes before lawmakers wrap up their 2018 legislative session.  

Separate bills in the House and Senate would cut taxes by as much as $2 billion over five years.  

Both chambers would also increase sales taxes to help cover the cost of the income tax cuts.  

Sen. Pam Jochum (D-Dubuque) is ranking Democrat on the Senate Ways and Means Committee.   Speaking on Iowa Public Radio’s River to River, she predicted low to middle income taxpayers would barely come out ahead.

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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.  

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Gov. Reynolds' $1.7 billion tax cut bill was the subject of a public hearing at the statehouse last night, where dozens of Iowans weighed in for and against.  

The bill which is under consideration in the House cuts personal income taxes by up to 23 percent as well as small business taxes.    It would cost the state treasury $300 million a year starting next year.

One supporter, Amy Boozell, is a mother of five who works with the Boys and Girls Clubs of Story County.    She says working people deserve a break on their taxes.

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Katarina Sostaric / IPR

Hundreds of credit union supporters rallied at the Iowa Capitol Wednesday to protest a proposed tax increase.

Senate Republicans passed a tax plan last week that would raise taxes on credit unions and lower taxes on banks, which is escalating the rivalry between the two types of financial institutions.

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Round Two for Republican-sponsored tax cuts got underway at the statehouse today.   

Gov. Reynolds’ proposal to cut taxes by $1.7 billion over the next six years got its first airing in the Iowa House, one day after the Senate approved a bigger, faster plan.   

Senate Republicans call their bill “bold” to cut taxes by a billion dollars a year.  

The GOP is characterizing the governor’s plan as sustainable, practical, and pragmatic.    

The bill cuts personal income taxes by up to 23 percent. 

John Pemble

Iowa Senate Republicans have been fast-tracking $1 billion dollars in annual income tax cuts, as Democrats warn that could force huge spending cuts on education and health care. 

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Republicans in the Iowa Senate Wednesday night approved the largest tax cut package in Iowa history, approving a bill to reduce corporate and individual income taxes by as much as 30 percent. 

"Today is a monumental day for Iowa families and Iowa workers," said the bill’s sponsor Sen. Randy Feenstra (R-Hull). “Today, we are taking a bold step in making Iowa’s economy more competitive."

Iowa’s top corporate tax rate of 12 percent, currently the highest in the country, would be reduced to 7 percent under the bill.

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Republicans in the Iowa Senate Thursday put a tax cut bill on the fast track which would cost the state treasury a billion dollars a year.   Business groups are generally excited about making Iowa’s tax climate more competitive.   Democrats question how the state can afford the tax cuts without catastrophic effects on public services including education. 

Sen. Randy Feenstra (R-Hull) has been dreaming about this tax cut bill for a long time.

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Congress is close to righting an inadvertent wrong, according to Sen. Chuck Grassley (R-Iowa). At issue is a provision in the tax reform bill passed late last year that favors cooperatively-owned businesses, including many grain elevators.

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Now that the three-day partial federal government shutdown has ended, Iowa’s senior senator says it’s time to complete some unfinished business.

Republican Chuck Grassley says some 30 tax provisions that expired at the end of 2016 are top on his list, including one for biodiesel.

“Its lapse has created uncertainty for everyone from soybean farmers to biodiesel producers to truck stops,” Grassley says. “I’ve been strongly advocating for acting as soon as possible on extenders legislation that includes an extension of the biodiesel credit.”

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Gov. Kim Reynolds delivered a 43-minute Condition of the State Address to a joint convention of the Iowa House and Senate Tuesday, the first ever by a woman in the state’s history.   She laid out her agenda for the upcoming legislative session, and took the bully pulpit on the issue of sexual harassment.   

Reynolds received an unusually long standing ovation….just for showing up.

“It's an honor to be here today as your 43rd governor and to deliver my first Condition of the State address,” Reynolds began.   

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There was a spirit of optimism in the air as state lawmakers gaveled in the 2018 session. Opening day often brings talk of bipartisanship and cooperation, but that spirit never seems to last, especially in an election year.

Nevertheless, state Senator Pam Jochum, a Dubuque Democrat, struck a hopeful tone about the coming session, although her party is in the minority in a Senate controlled by Republicans 29 to 20. She says last session they made their voices heard.  

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State lawmakers return to the capitol Monday for their 2018 legislative session.  Majority Republicans achieved many conservative priorities last year, including scaling back collective bargaining restricting abortions, and expanding gun rights. More Republican initiatives are on the agenda this year.     

At the December meeting of the Revenue Estimating Conference, once again, analysts revised downward their estimates of tax receipts flowing into state coffers.  

Gov. Reynolds’ top budget aide said once again it will be status quo spending at best next year.

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John Pemple/IPR file photo

Senate Judiciary Committee Chairman Chuck Grassley says he is not questioning the White House’s vetting of potential federal judges after three judicial nominees were recently rejected. 

Grassley says it’s not that the rejected nominees lack legal capabilities, rather, they "probably lack good judgment." 

"And you want judges that are going to have good judgment—more important, a better word would be judicial temperament, meaning they’re going to leave their own views out of cases," Grassley says. 

John Pemble / Iowa Public Radio

Iowa Republican U.S. Senator Chuck Grassley has been….in his words…..dropped from the conference committee charged with writing a final version of the giant tax cut bills which have passed the U.S. House and Senate.       

Grassley is the current senior ranking member and past chair of the Senate Finance Committee.    

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Progressive groups are protesting outside of Sen. Chuck Grassley’s Des Moines and Waterloo offices Tuesday evening because of a comment he made related to the estate tax.

Grassley told The Des Moines Register scaling back the estate tax would recognize people who are investing as opposed to "those that are just spending every darn penny they have, whether it’s on booze or women or movies." The comment went viral on social media.

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Republican proposals to overhaul the federal tax code would give most Iowa households a tax cut next year, but the cuts would phase out for many by 2027.

Iowa Policy Project Executive Director Mike Owen says the middle class, on average, would get a tax cut in the next fiscal year.

"As time goes on, the much-advertised middle class aspects of this, which are a very small piece of the puzzle, are going to go away," Owen says. "And the big breaks will remain in place for very wealthy millionaire, billionaire families and for wealthy corporations."

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A terror attack in New York, new revelations about the Trump campaign's possible collusion with Russian officials, and a stalled plan for tax reform are all covered on this edition of Politics Day on River to River

Host Ben Kieffer talks with Wayne Moyer, Rosenfield Professor of Political Science at Grinnell College, and Tim Hagle, University of Iowa Associate Professor of Political Science. 

Hagle says that even though George Papadopoulos may have been an unimportant figure in the Trump campaign, his guilty plea does not look good for the Trump campaign. 

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Iowa's U.S. Senator Joni Ernst says she’s hopeful lawmakers will pass legislation she says will help people facing steep premium increases for individual health insurance policies under the Affordable Care Act.

About 72-thousand people in Iowa face increases of nearly 60% after the state withdrew its proposal for a stopgap plan that would have provided relief. In this interview with River to River host Ben Kieffer, Ernst says the current situation puts a lot of Iowans in a bind.

Ben Terrett

Senate Minority Leader Chuck Schumer says it is difficult to govern with what he calls a president "zigging and zagging" on his support of bipartisan efforts to make changes to the Affordable Care Act. In this politics Wednesday edition of River to River, host Ben Kieffer is joined by professor of political science at Iowa State University, Jim McCormick.

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The Iowa economy is still growing, but not as robustly as predicted, and tax receipts for this budget year are off to a slow start.    

That’s the conclusion of members of the Iowa Revenue Estimating Conference,  who say unless things pick up, this year’s state budget of $7.3 billion will have to be trimmed by roughly $130 million.

Department of Management Director Dave Roederer says there are several drags on the economy.

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Alternative nicotine products purchased online in Iowa are now subject to sales taxes for the first time under a new law that went into effect July 1st.  

Up to now, electronic cigarettes and vaping products could only legally be sold in Iowa stores and vending machines.     

Now online companies must acquire permits, restrict sales to those 18 or older, and collect state and local option sales taxes.  

So far only a handful of online sellers have acquired permits.

joni ernst
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At a town hall Tuesday in Washington, Iowa, Sen. Joni Ernst took several questions about the so-far unsuccessful Republican efforts to repeal and replace the Affordable Care Act.

Some questioners asked Sen. Ernst to support "Medicare for all," while others said they want no government involvement in health insurance.

Ernst says bipartisan groups of lawmakers are working on healthcare solutions after "repeal and replace" legislation failed several times in the Senate this year.

factory
Christopher Dilts [Barack Obama / flickr]

An Iowa research group says manufacturing jobs continue to decline in the state, even after a new sales tax break was given to manufacturers. 

According to the Iowa Policy Project, a tax break that makes more manufacturing supplies exempt from state sales taxes has not led to more jobs in the manufacturing sector.

The statement comes after the Legislative Services Agency announced that tax break could cost the state about $100 million. It was originally expected to cost about $21 million. 

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The Iowa Attorney General’s Office says that for once, a caller claiming to be working on behalf of the Internal Revenue Service may not be a scammer, but instead a legitimate private debt contractor. 

Last month the IRS Private Debt Collection Program went into effect. Congress enacted the law in 2015, authorizing the federal agency to use private collections firms to call people who owe overdue taxes.

The debts targeted in this program are older, past-due balances the IRS is no longer actively seeking to collect.

Iowans will have to wait a bit longer to get their state tax refunds this year, as fraud prevention is creating delays.

The Earned Income Tax Credit is a prime target for criminals, so the federal government is taking more time to process tax returns. Victoria Daniels of the Iowa Department of Revenue says this affects state tax refunds as well.

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A Republican-sponsored committee at the statehouse Monday got an earful from Iowa businesses and individuals who might be affected if the GOP succeeds in scaling back hundreds of millions of dollars in tax breaks.   

Both parties agree tax credits are one of the fasting-growing pieces of the state budget.  

The cost of one list of credits approaches half a billion  dollars, ranging from incentives for businesses to attract new jobs, to tax breaks for families who adopt kids, to credits for contributions to private school tuition.

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Democrats and Republicans squared off in the Iowa House today over public financing of campaigns, as a GOP bill was approved to eliminate a limited form of the practice in Iowa. 

On a party line vote, the House Ways and Means Committee passed a bill to get rid of the checkoff on Iowa income tax forms that allows a contribution to the Republican or Democratic party or to a campaign fund that is then distributed to the major parties.

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