Tax credits — they add up.
Give a little here. Give a little there. It’s only a little bit at a time.
Or, it is death by a thousand cuts.
House File 1, a bill sponsored by State Rep. Jacob Bossman (R-Woodbury) increases the maximum net income amount used in determining eligibility for the Early Childhood Development and Child and Dependent Care Tax Credits. The maximum doubles from $45,000 to $90,000. The change is retroactive to tax years beginning on or after Jan. 1, 2021.
In essence, it is up to a $250 increase to tax credits per child for people making $45,000-$90,000 with children 3-5 years old.
In the next six years, the increase is expected to cost the state $4.2 million per year.
And the consequence — income tax reduction triggers for Iowans could be delayed.
“Since this bill is projected to reduce General Fund revenue in FY 2022 and after, the bill’s changes will modestly reduce the possibility of achieving both revenue triggers,” the bill’s Fiscal Note says. “As a consequence, the bill could result in delayed implementation of the income tax reduction.”
If the goal is to provide Iowans more of their own money back, couldn’t we focus on cutting taxes for everyone instead of handing out tax credits?
The bill will be in subcommittee on Monday, Jan. 25 at 11 a.m.
Representatives Jane Bloomingdale, Brooke Boden and Lindsay James will serve on the subcommittee.