This week the Senate debated and passed what has been known as the ‘Big Tech Censorship’ bill, Senate File 580. This bill requires social networking websites like Twitter or Facebook to respect the free speech rights of Iowans, protected by both the United States and Iowa Constitutions. If the tech giants don’t respect these fundamental rights of Iowans, they will lose their tax incentives that are paid for by the very people they are censoring.
Additionally, SF580 prevents taxpayer money from going to companies that remove an Iowan’s ability to download social networking sites, purchase protected publications and materials from the online marketplace, or allow Iowans to opt-out of post-promoting or shadow-banning algorithms. This bill does not prohibit these companies from operating in Iowa. It simply says that if they choose to censor Iowans, they will not receive the generous subsidies and tax credits currently offered to them.
Iowa has historically had some of the highest tax rates in the country, and those tax rates are made worse because they are effective at a much lower income level than many states. In 2018 we passed the largest tax cut in Iowa history but the lower tax rates could not fully take effect until we hit certain targets related to economic growth. SF576 eliminates those targets and instead establishes January 1, 2023 as the date when these lower rates go into effect. The lower rates coupled with the certainty of the effective date provides job creators an incentive to grow and create more opportunities for Iowans.
Iowa is only one of six states to still have an inheritance tax, sometimes referred to as a death tax. SF576 also phases out the inheritance tax over a three-year period. The inheritance tax was eliminated years ago in Iowa on estates being passed from lineally, such as a parent to child. However, the tax remained for other inheritance such as uncle to niece. After a lifetime of paying tax on nearly every single transaction and activity in life, it’s finally time to say enough of government taxing Iowans beyond the grave.
During our discussion in the Senate about this tax cut bill, we considered a portion of the recently passed $1.9 trillion American Recovery Plan that contains some language that attempts to prohibit states from lowering taxes between 2021 and 2024. This language appears to be unconstitutional on its face, and is offensive to me as a state lawmaker. I believe it’s extraordinarily inappropriate for Nancy Pelosi, Chuck Schumer, and Joe Biden to dictate state fiscal policy to Iowans. We have been working for years to get Iowa’s budget under control so that we can finally implement these tax cuts, and now these federal overlords are trying to block us from lowering taxes for Iowans. And, at the same time, they are bailing out states that can’t balance their own budgets. The unrestrained hubris of these federal politicians apparently knows no limit.