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March 2009

Strawn Statement on Federal Deductibility Public Hearing

Statement from RPI Chairman Matt Strawn

This evening, Republican Party of Iowa Chairman Matt Strawn released the following statement following the ordered shutdown of a public hearing of the Iowa House on House File 807

DES MOINES, IA. -- In an unprecedented display of political arrogance, Iowa House Speaker Pat Murphy tonight ordered State Troopers to remove hundreds of Iowa citizens from the Iowa House Chamber during a public hearing on proposed legislation to raise income taxes on over 450,000 Iowans.

Matt_strawn Matt Strawn, Chairman of the Republican Party of Iowa, said: “Never have I seen such a gross display of arrogance and disdain for Iowa taxpayers. The Iowa House is supposed to serve as the people’s house, the house where great ideas are debated and discussed. But tonight, House Speaker Murphy made it clear the Iowa House is his house as he sent hundreds of Iowans packing.

“What Speaker Murphy heard tonight was the truth from Iowa taxpayers, and he didn’t like it. Citizens across Iowa are outraged about a state government that wants more and more of their hard-earned money.”

“These Iowans came to the State Capitol to exercise their rights and express their opinions on this ill-conceived, job-killing legislation. Rather than embrace this discussion, Speaker Murphy shut it down and sent the people home.

“Shame on you, Pat Murphy. And shame on majority Democrats for attempting to shove this horrible legislation down our throats. The day you tried to silence Iowans will never be forgotten,” concluded Strawn.


Statement on Legislation that Eliminates Federal Deductibility and Forces Iowans to Pay a Tax on a Tax

Sen. McKinley: Eliminating federal deductibility and forcing Iowans to pay a tax on a tax will harm Iowa families and businesses and seriously stifle job creation

DES MOINES, IA. -- Senate Republican Leader Paul McKinley (R-Chariton) issued the following statement today in response to tonight’s public hearing where hundreds of Iowans turned out to voice their opposition to legislation that would gut federal deductibility and forces Iowa families, businesses and employers to pay a tax on a tax:

Paul_mckinley “I am adamantly opposed to forcing Iowa families and employers to pay a tax on a tax through the elimination of federal deductibility. With 80,000 Iowans out of work, this legislation does nothing to create jobs and instead could seriously kill job creation as it pushes more tax burden on to the shoulders of Iowa’s small businesses which creates two-thirds of all new jobs in this state. This tax on a tax legislation only seeks to have government continue to pick winners and losers while further crippling our business climate which is already second to last in the nation.”


Rep. Paulsen: Federal deductibility update

Update: Repeal of Federal Deductibility is tax increase in every tax bracket!

Yesterday’s newsletter addressed the Democrat proposal to eliminate federal deductibility; a tool that allows Iowans to deduct our federal income taxes from our ordinary income prior to calculating our income for state taxes. This is the largest, and in some cases the only, tax deduction available to many hardworking Iowans.

Last night the House Ways & Means Committee passed out the proposal on a party line vote. 14 Democrats voted aye – 11 Republicans voted no. House File 807 is the new bill number as the bill moves forward and becomes eligible for debate in the House.

After having additional time to study the proposal, we have discovered exactly what we expected: more Iowans than originally stated are going to see a tax increase. It is disheartening to hear this explained to Iowa’s taxpayers as a tax cut for two-thirds of Iowans. The facts tell us-- it is not.

Under the Democrats’ proposal, 50.9 percent of Iowans will either see no change in their tax liability or see a tax increase in 2009. 40% of the individuals receiving a tax increase make less than $40,000 per year. 69% of the individuals receiving a tax increase make less than $70,000 per year. See the breakdown of HF 807 at http://iowahouserepublicans.com/wp-content/uploads/09-feddeductibility-finalversion.pdf.

And believe it or not, over 10% of the individuals receiving a tax decrease in 2009 make over $100,000 per year. Based on the discussion last night in committee it appears to be hit or miss as to who the real winners and losers are.

Additionally, the Democrats have failed to inform Iowans about the implications of their proposal in 2011. On December 31, 2010, the federal tax relief of 2001 and 2003 will expire. It appears now that Iowans’ federal income tax liability will increase by $160 – $180 million. This means that you’ll lose the ability to deduct your federal taxes less than two years before your federal taxes are set to dramatically increase.

Finally, the Democrats’ proposal has the potential to put Iowa small businesses in an even deeper hole. Because many Iowa small businesses are structured as individual tax payers they too will see their taxes increase. The way many of these businesses will try to absorb this cost is by eliminating jobs or by passing the added expense onto the consumer. Either way, our struggling economy will continue to suffer under this plan.

Make no mistake this bill is a tax increase on Iowans in all tax brackets from day one. And within a few years it will result in a huge tax increase for almost every single Iowan.

When this bill is considered by the legislature, House Republicans will fight on behalf of all taxpayers and their ability to keep more of their hard earned dollars.

PUBLIC HEARING: Tuesday, March 31, 2009 Location: House of Representatives Chamber, Capitol Building, Des Moines

Time: 7:30 pm-9:30 pm tonight.

If you can attend the public hearing at the State Capitol on Tuesday at please join us.

EMAIL AND PHONE CALLS If you are not able to make it but still want to make a difference please call and email your elected officials today.

House Switchboard: (515) 281-3221

Senate Switchboard: (515) 281-3371

Email Lookup: http://www.legis.state.ia.us/aspx/Legislators/LegislatorInfo.aspx


Gov. Culver: When, not if, for Microsoft and Iowa

DES MOINES, IA. -- Following a meeting with officials from Microsoft in Redmond, WA today, Governor Chet Culver said the company remains committed to their major project in Iowa.

Last August, West Des Moines was selected as the site of the company’s new data center; in January, Microsoft announced the project may be delayed because of the economic downturn. Governor Culver met with Microsoft officials to ask them to continue with plans for their project.

Governor Culver released the following statement following today’s meeting:

“I had a very positive, productive meeting with Microsoft today about their plans for Iowa. In fact, I’ve been assured by Microsoft that it is not a question of ‘if’ but of ‘when’ they move forward with this project in Iowa. They understand Iowa has a great workforce, a great quality of life, and is a great place to do business. And I look forward to Microsoft playing a role in Iowa’s economic success story.

“We also had a good discussion about how technologies which Iowa has been a leader in developing, such as maximizing the use of wind and renewable energy, could play a role in the success of Microsoft’s new facility.

“I am absolutely committed to bringing high-quality, innovative jobs to Iowa, and I am glad that Microsoft can be an important part of that effort.”


Iowa Teacher of the Year Nominations Due April 15

DES MOINES, Iowa – Individuals across the state have the chance to honor an Iowa teacher by nominating him or her for the 2010 Teacher of the Year. The nomination deadline is April 15.

The award provides an opportunity to recognize an Iowa teacher who motivates, challenges and inspires excellence. The Iowa Teacher of the Year may serve as the Iowa Ambassador to Education, acting as an education liaison to primary and secondary schools in the state. The teacher may also attend the National Teacher of the Year Program Conference and is invited to attend a variety of events in Washington D.C. during National Teacher of the Year Recognition Week. While in Washington D.C., the teacher is recognized by the U.S. President and the current national Teacher of the Year.

Awardees are chosen by a committee that includes representatives of the Iowa Department of Education (DE), the Iowa State Education Association (ISEA), the School Administrators of Iowa (SAI), the Parent Teachers Association (PTA), the past Iowa Teacher of the Year, and representatives from higher education institutions.

The Iowa Teacher of the Year Award was established in 1958 and is sponsored by the Iowa Department of Education through an appropriation from the Iowa legislature.

Please visit the Iowa Department of Education website at http://www.iowa.gov/educate to obtain a nomination form.


President Miles Thanks Students for Participation In Alternative Spring Break Activities

Many students from Iowa’s public universities recently gave up their spring break vacations to volunteer their time and services to assist Iowans and others across the country. The volunteer effort was most impressive in the Cedar Rapids area, where students from the University of Iowa and Iowa State University assisted homeowners in the cleaning, repair, and reconstruction of many flood-damaged homes still in need of these services nine months following the devastating flood. With their hard work and dedication to this cause, our students served as fine ambassadors of Iowa’s public universities, not only to the residents of Cedar Rapids, but also to the many students from across the country who traveled to Iowa to participate in the volunteer effort.

Our students also provided services for worthy causes outside of the state. University of Iowa law students traveled to New Orleans to clean and rebuild homes, and to assist New Orleans Legal Aid with client intake and other legal services. Iowa State University students provided farm services at a Colorado substance abuse and rehabilitation center, and for an Arkansas non-profit organization dedicated to addressing world hunger and poverty. And University of Northern Iowa students worked with the homeless in Denver and San Francisco.

The Board of Regents extends its sincere thanks to these students for their recognition of and response to these many needs, particularly for the Cedar Rapids flood victims. We hope the volunteer efforts proved to be a very valuable and rewarding experience for our students, that they will be encouraged to participate in alternative spring break programs in future years, and that they will encourage their fellow students to join them in these important service projects.


Your Capitol Voice

By State Representative Jeff Kaufmann

Jeff_kaufmann As we head into the final weeks of the 2009 session, several more bills were declared dead for this year. Three of these bills gained a great deal of attention.
1. The “early start date” bill would have set the 4th Monday in August as the earliest date when any school in Iowa could begin.
2. The “compulsory age” bill would have moved the mandatory age for teenagers to remain in school from 16 to 17.
3. The Electoral College reform bill would have potentially disallowed Iowa’s vote for president and awarded our electoral votes to the winner of the national vote. This is a complex issue and I will devote a column to it if this bill moves in the future.  I am very happy that this one is dead for the session. Even the Governor rejected this idea.

Budget discussions dominate the Capitol, as well as the 750 million bonding proposal by the Governor.  I am sensing that the bonding proposal may be losing a bit of momentum.

The introduction of a bill late last week to eliminate federal deductibility on your state income taxes has galvanized opposition and support.  I predicted this issue would likely emerge two weeks ago in my column.  I fully expect a long and intense debate this week or the next.
 
Proponents point to a potential middle class tax cut, more redistribution of dollars from wealthy to poor, and more competitive upper income tax rates.  Critics see this as a last minute attempt to access dollars for the budget, the elimination of a large deduction for many citizens in all income brackets, and an unfair tax on a tax. As promised when I ran for office, I will oppose the elimination of federal deductibility.
 
I am also hearing rumors that the collective bargaining bill, vetoed by the Governor last year, is coming back before the end of session.  Labor unions have demanded at least one labor bill be debated this session and this looks to be the one.  The unanswered question about this collective bargaining bill is how much it has to be changed in order to get a guarantee from Governor Culver to sign it.  My guess is there will be relatively small changes.
 
This bill pits unions against school boards, city councils, and tax organizations.  If the bill is debated, it will likely move fast with no chance to amend it. At this point in the session, if the votes are there, a bill is moved quickly.  Regardless of which party has the majority, these votes are usually party-line.  A key question will be the votes of the six Democrats that opposed Prevailing Wage earlier this year.
 
Finally, I will continue to lead the fight against the decision of Chief Justice Ternus to remove civil trials from Cedar and Muscatine counties.  I am proud to welcome two Democrats and another Republican as partners in a Monday press conference to fight this inherent inequity.  We will be joined by several of our constituents from home.  We will stand together and forget party lines and individual differences to hopefully defeat this ill-advised decision.  I will update you in next week’s column.
 
It is this time of year when I begin to worry about the large Standings bill at the end of session.  This bill is huge; it is often passed in the middle of the night, and is loaded with pork and policy that could not be passed on its own merits.  Expect a “no” vote from me if this happens yet again.


Capitol visitors: Mike Shuger, Al Kroeger, Mark Henning, Dave Mohr, Jim Williams, Jack Schmoll, Freeman Kaufmann, Wilton; Kirk Trede, Durant; Dennis Anderson, Moscow; Jeanette and Breonna McMahon, West Liberty; Kathy Moravek, Mechanicsville; Larry Quinn, Lowden; Eric Krob, Lisbon; Mary Jo Hainstock, North Cedar Superintendent.
 
A special thanks to Becky Allgood, Pam Freeland, Tim Walch, and Cheryl Schreier representing the Herbert Hoover Association in West Branch.  They along with Governor Robert Ray presented me the Hoover Association’s “Uncommon Public Service Award” in the Capitol on March 24th.  I am very grateful.  Thank-you.

Contact information
 E-mail me: jeff.kaufmann@legis.state.ia.us
 Write me:   State Capitol Des Moines IA 50319
 Call me:      1-515-281-3221


Some Ideas for Tax Reform

MOUNT PLEASANT, IA. -- The current economic recession brings an opportune time to discuss serious tax reform. In order to revive the economy, the best policy that the federal government can engage in is tax reform. Only stimulating the private sector, that is, keeping money in the hands of those who create jobs, will result in a fast recovery and creating jobs. 

Kristina Rasmussen, Director of Government Affairs at National Taxpayers Union, recently wrote, “Ten Tax-Hike Threats in the 111th Congress,” which appeared in Human Events. “With the arrival of President Barack Obama at 1600 Pennsylvania Avenue and strengthened Democrat majorities in the House and Senate, taxpayers will soon be facing a sea — some would say a tidal wave — of changes in tax policy,” wrote Rasmussen.  Some of the possible tax-hikes include a repeal/expiration of the 2001 and 2003 tax cuts, windfall profits energy taxes, and an increase in the Federal excise tax on cigarettes and gasoline.

In addition to the possible tax increases that may occur in the 111th Congress, taxpayers will have to be ever watchful on the rise of government spending, especially with the passage of an $800 billion economic stimulus bill. The February 16, 2009 cover story of Newsweek may have set the agenda for the new administration. The Newsweek cover story read: “We are all socialists now: The perils and promise of the New Era of Big Government.”

Chris Edwards, Tax Policy Director at the CATO Institute, wrote in the 2009 Cato Handbook for Policymakers that “today, federal taxes account for about 18 percent of GDP, and federal tax laws and regulations span 67,506 pages…”  As Congress considers legislation to handle the current economic crisis, they should focus on serious tax reform. Tax reform ideas such as the National Sales Tax and the Flat Tax deserve a fair discussion.

Americans should not be happy with the current move toward European style socialism and continual drift away from constitutional government. Achieving tax reform would be one policy option to reverse the current course.  “A true successful economic policy must consist of following the constitutional limited government policies of cutting taxes, reducing government, and reducing the deficit,” said John Hendrickson, a Research Analyst with Public Interest Institute in Mt. Pleasant, Iowa.

“Some Ideas for Tax Reform” from Public Interest Institute’s LIMITS, is available at www.limitedgovernment.org.

For an interview or more information on this issue, contact John Hendrickson, Public Interest Institute Research Analyst.


State gave $750,000 of your money to Planned Parenthood

Last year the Iowa Legislature gave $750,000 of our tax money for family planning.

Planned Parenthood expects to give away l,400 implantable birth control devices.

The Intrauterine devices, or IUDs, and Implanon cause early abortions, they also devalue women by allowing for their easy exploitation by sexual predators.

The devices will make healthy women infertile (unhealthy). 

Planned Parenthood calls this “HEALTH CARE?”

Unmarried women should not be engaged in sinful sexual relationships and our government should not be promoting promiscuity.

Married women should trust God for the number of children that they have. We do not know who we are excluding. God can plan our families better than we, and certainly better than Planned Parenthood. 

Reads Deuteronomy 30:l9 “I call heaven and earth to record this day against you, that I have set before you life and death, blessing and cursing; therefore choose life that both you and your descendants may live.”

We cannot solve human problems by stomping out human life. A baby is God’s opinion that the life should go on.
 

Donna Holman

Stopp of Iowa (Stop Planned Parenthood), Keokuk, IA.


Legislators expect 450,000 of us to believe that a Tax increase is a Tax Cut?

I find it hard to believe that the very people who have increased the Iowa State budget by $1 billion in only two years are actually implementing a "middle class tax cut."  This is going to come about through the repeal of the Federal Deductibility provision of Iowa tax code.  For those not expert in tax issues - federal deductibility is subtracting from your Iowa taxable income the amount you already paid to the Federal government in income taxes.  Repealing this deduction is a tax increase.  Let me repeat: The repeal of a deduction is an increase.  This is the largest deduction most Iowans have.  As a result of repealing federal deductibility the State will collect almost $600 million in new revenues.  Sounds like a tax increase to me.
 
The "middle class tax cut" Governor Culver and the Democrat Legislators propose following the repeal of federal deductibility is a minor reduction in the overall state income tax rates.  This will result in tax savings of from $17 to about $50 for the very lowest income level workers, according to Senator Dvorsky in last Saturday's Press-Citizen.  For families making over $120,000 he stated that their taxes will go up.  Note that a family with two workers, each making $60,000 would fall into this category.  They are "rich" and deserve to be taxed more according to Governor Culver and the Democrat Legislators.  Over 450,000 Iowans fall into this "rich" category and will see their state taxes go up under this plan.  Doesn't sound like a middle class tax cut to me.
 
This means many of us who work for the University of Iowa or Kirkwood Community College as administrators, doctors, or senior instructors - after many years and thousands of dollars in education and training, will be penalized for our success.  This includes city, county, and school district workers who have reached the top of their profession after many years of dedication.  You and your families will be penalized.  It includes senior employees at ACT, Pearson, the Press-Citizen, or Proctor and Gamble, just to name a few others.  It includes small business owners, the main economic engine of this country.
 
In practical terms, if federal deductibility is repealed, all Iowans will be paying taxes on money paid as taxes to the federal government.  A tax on a tax simply isn't fair.  For example, the average household in Johnson County pays over $13,000 in federal taxes, the 330th highest rate in the country.  This is basically in the top 10 percent of all 3,112 counties in the U.S.  Translation: We already pay a lot more federal taxes than almost everyone else in the country.  If this change passes and Governor Culver signs it - we will pay taxes on the taxes we already paid.  Get it?  Pay Taxes on Taxes.
 
In particular this tax increase will affect small business owners.  It is a huge increase on the very Iowans who work, who start businesses, and who create jobs.  These are the people and employers on whom our state's economic recovery depends.  These people will see their taxes increase by nearly 7 percent.  That is not a "middle class tax cut."  Additionally, federal deductibility is usually the largest state deduction for most renters, who don't have mortgage interest to deduct.  It is the second largest deduction for most homeowners.  This will affect all of us negatively.  We will pay Taxes on Taxes.
 
At the same time elected officials in Iowa City, Coralville, and Johnson County are asking us to voluntarily agree to increase sales taxes on our families by 16 percent.  That "only one penny" will result in almost $70 in additional sales taxes being paid by a worker who makes $15,000.  These folks are already paying the "only 1 penny" SILO increase of $70 of two years ago.  Additionally, the Iowa City Community School District is proposing a property tax increase of $70 per $200,000 house to balance their budget.  This is on top of the recent Conservation Bond tax increase of only $50 on the average homeowner.  When will it stop?
 
During a recent legislative forum, the Johnson County Legislators called me "goofy," and "tax paranoid" for disagreeing with them, for challenging their claim that the repeal of federal deductibility is a middle class tax cut.  When does daring to have a difference of opinion with your elected officials make you "goofy?"  When I read the paper, watch the news, and start adding all of these increases - the only goofy thing I see is my paycheck getting smaller and smaller.  The only thing going down is the amount of money the government is leaving us to support our families.  Funny, maybe we would be better off not working, not owning a home, not shopping, and not having families.  Wonder where our elected officials will get the money for their expensive artwork and pork barrel programs then?  Who will be left to pay taxes on taxes?
 
Call Governor Culver and the "goofy" Legislators from Johnson County who expect us to believe that repealing a deduction is a tax cut, and tell them that enough is enough.  Stop increasing our taxes, stop spending our money foolishly.
 
Deborah Thornton
Iowa City