The Iowa Senate overwhelmingly approved a tax cut this week that’s good for working families and the Iowa economy.
Senate File 402 is a tax cut for Iowans who pay the highest percentage of their income in state and local taxes, even though they are among the state’s lowest paid workers. The legislation that we approved March 20 increases the state’s Earned Income Tax Credit (EITC) from 7 percent to 20 percent of the federal EITC.
Who will benefit? About 210,000 Iowa families that make less than $45,000 a year. Most are working fulltime and many work more than one job. They 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 right now.
First signed into law by President Ronald Reagan, the EITC has helped more Americans climb out of poverty than any other single effort. Boosting the EITC is especially important in a state like Iowa where 20 percent of all children live in poverty. Studies tell us it is rare for children who grow up in poverty to earn a college degree. We shouldn’t abandon these Iowa kids to a low-skill, low-wage future. They are our future—the future of a high-wage, high-skill, globally competitive Iowa economy.
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.
Senate File 402 now goes to the House for consideration.
UPCOMING PUBLIC FORUMS
Saturday, March 23
8:30 AM Mount Pleasant Legislative Forum
Sponsored by Chamber of Commerce
At Iowa Wesleyan College Library
601 N Main St, Mt Pleasant
Friday, April 05
12:00 PM First Friday Legislative Forum
105 N Park Drive, Keokuk
This is a legislative update from Senator Rich Taylor, representing Henry and Lee counties and portions of Washington and Jefferson counties. For newsletters, photos and further information, go to www.senate.iowa.gov/senator/taylor.
To contact Senator Taylor during session, call the Senate Switchboard at 515-281-3371. Otherwise he can be reached at home at 319-931-1568. E-mail him at email@example.com.
Senator Taylor is vice-chair of the Agriculture Committee. He also serves on the Economic Growth, Judiciary, Local Government and Transportation committees, as well as the Justice Systems Budget Subcommittee.