The Iowa legislature is considering a pair of bills that would enshrine in the state constitution limitations on raising income taxes - SJR14 (formerly SSB1207) in the Senate and HSB232 in the House.  These bills would require a two-thirds majority to pass any income tax increases.  This is a high hurdle to jump in the event that the state needs to increase revenue.  A simple majority should be adequate to pass an income tax increase.  Interestingly, the legislation would not require a similar super-majority to reduce income taxes.

This bill is unnecessary and could have major implications on enshrining an unfair regressive tax system onto the shoulders of everyday Iowans.  Income tax is the fairest tax since it can be set up to have the higher taxes applied to incomes that are most able to pay the taxes. 

Future legislatures may want to make the income tax more fair for all tax payers.  Over the years, there have been numerous successful efforts to shift taxes onto sales tax and away from income tax and to lower the top tax brackets, which has a greater adverse impact on lower income families and working families.  One of the problems with our income tax system is that the system is fraught with loopholes, tax credits, and tax exemptions. 

Adding to this are efforts to significantly reduce income taxes, leading to a flat tax, and even efforts to eliminate the income tax.

Making matters tricky are huge influxes of federal money - COVID funds, federal infrastructure money, and stimulus money.  At some point, that money will have been spent.  The state will then return to using the money that is generated through our state taxes, including income taxes. 

If we have underestimated the amount of tax money that the state's economic activity generates, we may want to increase the income tax rates in order to pay for the services Iowans need, expect, and want from state government.  It makes no sense to have a super-majority requirement for increasing those taxes.

This constitutional amendment is not  needed.  It does not fix things that are broken.  It does not move our state forward.  Therefore, we encourage our legislators to oppose these bills.

Note: A constitutional amendment has to be passed by two consecutive legislative sessions (a legislation session lasts two years, starting the January following a general election) plus a vote at the next general election – a process that requires at least two years.

Ask your state senator to oppose SJR14 and your state representative to oppose HSB232.