Kim Reynolds Gives $25,000 Tax Cut To Millionaires

Under the tax bill signed by Governor Kim Reynolds, millionaires cash in with nearly $25,000 in tax cuts annually while middle class Iowans will receive between $100 to $300. Lower income Iowans will get a whopping $18 per year in cuts. The Iowa Policy Project (IPP), a nonpartisan, nonprofit organization that focuses on tax and budget issues, has issued estimates of the tax cuts on various income groups.

Reynolds’ original tax plan differed from the more extreme version ultimately passed by the Republican controlled legislature. However, since Reynolds happily signed it, she owns it and she must be forced to run on it. Reynolds and her GOP gang of tax-cutting accomplices were intent on competing for the most destructive economic plan possible to wreck Iowa’s budget. They eventually chose the one designed to do the most to cripple the basic functioning of state government.

The basis for Reynolds and her group of give-more-to-the-rich is the thoroughly discredited trickle-down economic model (see the Kansas failed experiment). Yet that hasn’t stopped Reynolds and her fiscally-challenged GOP legislative soul mates from pursuing this smoke and mirrors economic plan.

They succeeded without public input to pass a massive tax cut destined to severely damage Iowa’s ability to meet Iowans’ basic needs. One wonders why they didn’t wear masks as they raided the Iowa treasury by delivering a 150-page bill just prior to voting. Apparently, they did understand that robbing the Iowa treasury by doling out tax cuts to the rich and big corporations might look bad, so they wrote it in secret away from the publics’ prying eyes.

In addition to the direct effects of the enormous tax cuts for the rich, the IPP describes the collateral effects of implementing Reynolds’ tax scheme. Other taxes such as the sales taxes and property taxes will increase as a direct consequence of the Reynolds’ income and corporate tax changes. Her plan will raise sales taxes on many lower and middle-class Iowans from $35 to $60 per year. Since sales taxes are very regressive, lower and middle-class Iowans bare a larger burden than the rich from increasing sales taxes. Since Reynolds and her gang want to punish lower income Iowans, why not design a sales tax plan that specifically targets them?

The Reynolds’ income and corporate tax cuts will reduce Iowa’s revenues by $400 million a year by 2021. Depending on growth, the hit to Iowa revenues will reach $643 million per year by 2023. Iowa currently is unable to adequately fund Iowa public schools, universities and community colleges. Reynolds and her Republican gang have chosen to risk the future of Iowa’s educational community simply to give massive tax cuts to rich Iowans and profitable corporations that don’t need them.

Education is just one of the responsibilities of Iowa state government that Reynolds and her cronies are short changing. The continuing Medicaid privatization disaster will require more money as the for-profit companies are demanding increases. Iowa’s seriously impaired waterways continue to be ignored; and the token bill the Republicans passed doesn’t begin to seriously address the magnitude of the problem. Other state agency budgets have already been cut dramatically.

Based on the economic reality of these fiscally irresponsible tax cuts, sales taxes and property tax increases seem inevitable. Iowa cities, counties and school districts will be forced to find other sources of revenue simply to maintain basic services. Republicans always remind the public that they believe in balancing the public treasury just as families must balance their finances. Based on that logic, they have just reduced the Iowa public treasury’s income but haven’t explained how they plan to make up the deficit.  The obvious answer is they have no plan. This is a smoke-and-mirrors fiscal illusion to cut government by claiming some mysterious unproven growth theory.

Combine their lack of a rational fiscal plan with the fragile condition of Iowa’s agricultural economy and Iowans are facing a budget nightmare. Iowa’s agricultural economy isn’t projected to grow and the Trump tariff consequences could put Iowa back in a recession. Governor Reynolds and her comrades are throwing the dice and betting Iowa’s economic future on a thoroughly discredited trickle-down fantasy.  We expect our children to make decisions based on facts, yet Iowa Republicans are betting our children’s future on fairy dust economic theories.


by Rick Smith
Posted 5/15/18

1 Comment on "Kim Reynolds Gives $25,000 Tax Cut To Millionaires"

  • But, but, Rick, her ads extol her (feel for the Iowa people) and how concerned she is for them, growing up as she did. The entire Right side of the aisle (Reynolds, mote definitely) seem to be echoing Mulvaney’s pay-for-play. If you shower me with money, I’ll give you all sorts of “incentives.” If you’re a working slob, you can go to the end of the line. That’s exactly what this execrable tax plan has done.
    “I got mine, and I’ll continue to get mine even as the state’s economy tanks, so go scratch.”

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