Jack Hatch on Tax Reform

Middle-class tax cut averaging $1,013 for all below $200K

1. The ever-increasing stress on middle-income families with children at home, when it comes to making ends meet; and
2. The rising number of dual-income households in which having two parents work outside the home is no longer a choice, but a necessity. Iowa's middle class has been squeezed too much for too long and its time to give these families a much-needed break.

Retain progressive tax system with higher filing threshold

1. Raising the per-child tax credit from $40 to $500. Iowa's current per-child credit of $40 is an embarrassment.
2. Exempting the first $1,000 in secondary earner's wages. A "dual-wage-earner" credit will give a break to households where both parents have to work to make ends meet.
3. Raising filing thresholds for individuals and families. The thresholds for single filers under age 65 would go up from $9,000 to $20,000 and for others under 65 from the current $13,500 to $24,500. This change helps Iowa retain a progressive income tax system while giving middle class taxpayers a break.
4. Changes to tax rates by bracket and top bracket reduction. The current 8 rates and brackets is reduced to just 4 rates (3%, 4%, 6.2% and 8.8%). The top rate falls from 8.98% to 8.8%.
5. Elimination of federal deductibility. The provision in Iowa's tax code makes Iowa's rates appear artificially high.