Cutting taxes for working families

State Senator Joe Bolkcom participated in a series of public hearings and discussed the importance of tax reliefs for working familys.

If new legislation becomes law, more than 260,000 Iowa households could see an increase in their state tax return, including the families of 37 percent of Iowa’s children.

The Senate Ways & Means Committee has approved Senate Study Bill 3116 to increase Iowa’s Earned Income Tax Credit (EITC) from 7 percent of the federal EITC to 13 percent.

Last year, the Iowa Legislature twice approved a similar tax cut for Iowa’s working families, once by unanimous votes in the Iowa Senate and the Iowa House. Governor Branstad, however, vetoed the legislation twice.

Iowa is one of only six states that taxes families earning less than poverty-level wages. That’s one reason the United Way of Iowa has made increasing the state Earned Income Tax Credit a high priority. Research shows that EITC is one of the best anti-poverty programs in the nation.

This $25 million tax cut will also help Iowa’s small businesses. When you cut taxes for struggling, working families, those dollars are spent locally on such necessities as food, gas, car repairs and medical bills.

At a time when special interests are pushing for hundreds of millions of dollars in new corporate tax cuts, we should put working families first. Boosting the EITC supports work, places value on raising children and puts money into local economies.

Raising the Iowa Earned Income Tax Credit should be the first priority for tax reform in Iowa.