A proposed constitutional amendment to require a two-thirds vote in both the House and Senate to increase Iowa’s individual or corporate income tax rates and also institute a single rate for Iowa income tax passed subcommittee hearings in both the Iowa House and Iowa Senate.
The proposed amendment would have to pass this general assembly as well as the next before it would ultimately be decided by Iowa voters.
Jake Highfill of Iowans for Tax Relief said the amendment offers legislators a rare opportunity to do something that has a long-term impact.
“This is one of those bills that will outlive all of you,” Highfill said. “This is a huge step in the right direction.”
Highfill said ITR’s polling shows 68 percent of Iowans support the amendment while just 17 percent oppose it.
Mike Owen of Common Good Iowa spoke against the bill, noting it erodes democracy and in essence allows a single no vote to count as two.
“This is really an assault on the principles of democracy and equity,” he said. “This is something that would enable 17 state senators or 34 house members to override the wishes of a vast majority. And really it enables you to have a vote long after you leave the legislature.”
Owen said the proposed constitutional amendment would make it “virtually impossible” to raise taxes moving forward.
“This is an incredible burden,” Owen said. “Ten years from now, we’re going to be in a fiscal crisis.”
Owen said either services will be significantly scaled back or taxes will have to go up, and this amendment threatens the ability to accomplish one of those activities.
Other opponents of the bill expressed concern with the flat tax proposal in the amendment. Tom Chapman of the Iowa Catholic Conference said such a proposal violates Catholic social teaching.
Members of society have a responsibility to give back, Chapman said.
“From those to whom much has been given, much should be expected,” he said. “Paying taxes is one way people can give back to society. We also have a principle of distributive justice, which suggests we should have special concern for the poor and vulnerable. We don’t want low-income people to pay what we would consider more than their fair share of income tax.”
Supporters of the bill added they believe the amendment is an opportunity for legislators to cement into law the accomplishments from the past seven or eight years of making Iowa more economically friendly.
Tyler Raygor of Americans for Prosperity said the amendment helps provide stability and predictability for taxpayers but still provides a way forward to increase taxes if necessary.
Republican State Sen. Jason Schultz said he’s been thinking about titles for the proposed amendment and offered two options:
The Bipartisan Citizen Wealth Confiscation Wealth Amendment
Citizen Wealth Confiscation Prevention Amendment
“What this does is prevent people from having their money taken away from them easily,” Schultz said.
According to polling, Schultz said it appears the people of Iowa want this amendment.
Democrat State Sen. Cindy Winckler said she opposes the effort and it creates an easier avenue to raise other taxes when revenues aren’t where they need to be. She said she worries about it leading to a return of sales tax on groceries or increased reliance on fees and fines.
Republican State Sen. Dan Dawson said creating a class warfare in Iowa is not healthy for Iowa and a flat tax provides a more even playing field.
“We had one of the worst tax codes of all the states in the United States (in 2018),” Dawson said. “It has taken us, well, six years now to really put us into pole position to build ourselves a competitive tax code. I think this is a good tool because it gives us some assurance.”
Dawson said the amendment is a tool that helps secure the gains made by legislators the last six years.
In the House, Democrat State Rep. Dave Jacoby said he finds it interesting an amendment can pass with 50.1 percent of the vote that will require a two-thirds vote to pass a tax increase.
“That isn’t very consistent,” he said.
Jacoby proposed requiring a two-thirds vote in order for the amendment to be adopted if it wants to set the same threshold for raising taxes.
While a constitutional amendment put before the people of Iowa for a vote is something Jacoby said he generally supports, he suggested doing the same on abortion as well as Education Savings Accounts.
However, he cautioned against going down the road of requiring a two-thirds vote in the legislature to increase the income tax because it “will destroy democracy.”
Republican State Representatives John Wills and Bobby Kaufmann supported the bill. Kaufmann said he will move the legislation if for no other reason than to give Iowans an opportunity to be heard on the issue.
