The importance of permanent tax relief
Over the last year, a common economic tool at the national level was the distribution of government funds directly to most Americans. While those payments have temporary value in addressing short-term economic impacts, that policy does little to advance the goal of creating long-term economic growth and a pro-growth environment. Permanent tax relief for Iowa families and small businesses gives them certainty in their efforts to provide for their families, invest in a small business and create or pursue new careers.
Last week, the Iowa Senate passed SF 587, a major reform to property taxes and mental health funding in this state. The centerpiece of that legislation moves the cost of mental health from property taxes assessed at the local level to the state level. By moving the responsibility for funding the mental health system to the state level, this policy eliminates the mental health levy on property taxes.
The Iowa Legislature has regularly undertaken efforts to reduce the property tax burden with credits and limits. However, the unrestrained rise in property values and local levy rates inevitably undermines any effort from the state to ease the property tax burden. The best way to offer some permanent property tax relief is to eliminate a levy. With the elimination of a levy, assessment increases have a smaller impact into the future and taxpayers do not have to worry about taxes rising again.
SF 587 included another permanent tax cut by again eliminating the triggers of the 2018 income tax cut. The most recent revenue projections have the state budget hitting one trigger, but missing the other trigger by only a fraction of a percent. By eliminating those triggers, Iowa families and small businesses can confidently plan for future tax rates and tax policy.
State Sen. Tim Kraayenbrink, R-Fort Dodge, represents Senate District 5.