Lawmakers eye income tax reform as Iowa legislative session loom - KTIV News 4 Sioux City IA: News, Weather and Sports

Lawmakers eye income tax reform as Iowa legislative session looms

UNDATED (KTIV)- Reform is a word you'll hear a lot from lawmakers when it comes to education, and taxes. Last session, Iowa lawmakers passed property tax reform. But, this session, the focus may shift to income taxes.

From property taxes, to teachers, Iowa lawmakers managed reforms of several big issues, last year. The challenge this year? Rep. Chuck Soderberg, (R) Le Mars says, "This year, I think the focus is on fully-funding the commitments we made last year."

Lawmakers also want to push through reforms to Iowa's income tax system, often called one of the country most complex. Rep. Chris Hall, (D) Sioux City says, "I think if we're going to reevaluate how we're taxing individuals, how we're taxing businesses, I think one of the first places we should look is that complexity, so it's more understandable to the average citizen."

Last year, Republicans in the House passed a bill with just basic choices come tax time. Rep. Chuck Soderberg, (R) Le Mars says, "You can calculate it using the current method using deductions. Or, pay a flat 4.5%. Right now, the current structure is over 6%." That "flat tax" was also an option in a bill Republicans in the Senate supported. Sen. Bill Anderson, (R) Sioux City says, "I don't necessarily think we need to be the lowest, but we have to be competitive."

That's not easy. Neighboring South Dakota doesn't have personal, or corporate income tax. And, Nebraska just finished a study to do away with both, as well.

Because this is the second-year of a two-year "assembly" of the legislature, both "flat tax" bills are still available for debate, or a vote, without having to reintroduce them.

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