March 28, 2024

Tax cuts means less services

The Iowa legislature passed the second largest tax overhaul, resulting in more than $2.8 billion over the next six years.

There are two sides to the tax cut. First, how much will an Iowan expect to save on their next tax bill? Second, what services might Iowans have to forfeit due to reduced taxes coming to the state?

How much will Iowans save on their tax bill? According to The Des Moines Register, filers with adjusted gross incomes of $10,001 to $20,000 will see the largest percentage cut, decrease 51.8 percent for an average savings of $18 per year.

Filers with income between $50,001 to $60,000 should see an average savings of 7.8 percent, or an average tax cut of $156 per year.

Filers with incomes more than $1 million per year will see a 19.4 percent savings, or an average savings of $24,636 per year.

An “average” Iowan might save approximately $243 per year, or about $20 per month. More than half of the individual income tax benefit will go to people with annual incomes of more than $150,000 who make up about 3 percent of the state tax filers.

At the same time there is a tax cut, there is also a tax increase — new taxes on video streaming services, and digital video rentals, as well as on-line sales tax. Iowans will pay less taxes on their incomes, but might pay more depending on their online purchases.

What will Iowans have to give up with less money coming into the state coffers? This year due to mid-session budget shortfalls, Iowa initiated budget cuts targeted at state universities, community colleges, the state’s justice system and human services. These budget cuts could mean closing of 30 Iowa courthouses. For an average of $20 per month tax savings, are you willing to gamble that your courthouse won’t close, pay more for tuition, and have fewer children and family services?

The Iowa tax-bill cuts give the most savings to the richest 3 percent of Iowans, while the rest of us get very little. However, we will be taxed more on online purchases, video streaming, and rentals. “Public” education is going to be a benefit of the past, and as many as 30 counties may face closing their court system; the tax-cut bill that the Republicans passed is keeping poor Iowans poor, and giving the majority of the tax-cuts to the rich, as well as jeopardizing rural communities.

Ann Fields

Dem. Candidate for
House District 28