Governor Vilsack Abandons Tax Relief

Iowa appears to have missed the chance for positive tax reform, and instead taxpayers are getting socked with a bill for new spending. The state legislature reportedly worked out a compromise with Governor Vilsack during a special session focused on economic growth. The deal included tax reduction and simplification, saving taxpayers $310 million a year, as well as new rules to protect reduce frivolous workers’ compensation lawsuits. The measures would have reduced Iowa’s complicated tax code from nine brackets to three, making the state more competitive and business-friendly.

Unfortunately, the package also included $503 million in new government spending.

Despite the appearance of a compromise, on June 19 Gov. Vilsack used his line-item veto power to strike down the tax code simplification and the workman’s compensation reform, keeping only the new spending. The result is a losing deal for Iowa.