The Iowa Senate has passed a package of bills that will lower taxes for Iowa citizens, employers and property owners. These initiatives will revitalize our communities, allow businesses to expand, create jobs and grow our middle class.
I hope this is the year that Iowa increases our state Earned Income Tax Credit (EITC) to 20 percent of the federal tax credit (SF 422). Republicans and Democrats in the Senate overwhelmingly approved this tax cut, which is good for working families and the Iowa economy, but the House has not yet acted on in it.
The EITC cuts taxes for low-income working Iowans and helps lift them out of poverty. A boost in our state EITC would benefit 210,000 Iowans who pay the highest percentage of their income in state and local taxes, even though they are among our lowest paid workers.
These Iowans are the parents of almost 40 percent of all Iowa kids. More than half of the benefit of this tax cut will go to households with incomes below $20,000 a year—households living in poverty. When these families work their way out of poverty, we all benefit. Their kids will be much more likely to graduate from college, join our skilled workforce and help build a strong Iowa future.
In addition, if this tax cut becomes law, Iowa communities will receive a $50 million boost in economic activity. Unlike other proposed tax cuts, almost every dollar of this tax cut will be spent locally.