Boeyink to Culver: “Do Your Homework Governor. Iowans Strongly Support Keeping Federal Deductibility.”
MUSCATINE, IA. – Jeffrey Boeyink, President of Iowans for Tax Relief, today asked Governor Chet Culver to rethink his recent statement in favor of complete elimination of Iowans’ right to fully deduct the amount they pay in federal income taxes on their Iowa tax return (Cedar Rapids Gazette, 1-6-08). Boeyink said, “Do your homework Governor. Iowans strongly support keeping federal deductibility.”
Boeyink cited polling from January 2007 that showed 78% of Democrats, 78% of Republicans, and 73% of independents all favored keeping federal deductibility, even if offered lower income tax rates in return for its elimination. Boeyink said, “Iowans understand that when politicians start talking about taking away federal deductibility what they are really saying is get ready to pay more. It is this simple, Iowans don’t trust promises to trade tax deductions for lower rates. They understand this shell game and have made it clear they don’t want to play.”
The ability to deduct federal income taxes on Iowa tax returns means Iowans do not have to pay a tax on income that is solely used to pay another tax – money you never get to see or use. In addition, federal deductibility is one of the few significant tax deductions left in the Iowa income tax code. For many middle income Iowans, the deduction for federal income tax payments is their largest state tax deduction.
A recent study by the non-partisan Public Interest Institute shows middle income Iowans are the primary beneficiaries of federal deductibility. As a group, those households with combined incomes between $40,000 and $75,000 save nearly twice as much from federal deductibility as those households with incomes in excess of $100,000. This recently released study can be found on the internet at: www.limitedgovernment.orgpublicationspubsstudiesPS-07-3.pdf.
Boeyink concluded: “Keeping federal deductibility has extensive, broad-based, and bi-partisan support. Governor Culver, if you want to improve the tax climate in Iowa to improve our state’s ability to compete for new investment and jobs, celebrate the 10-year anniversary of the across the board income tax cuts with a new round of income tax cuts for all Iowans.”