Over the last 25 years, even Iowans working fulltime have struggled to stay out of poverty. |Over the last 25 years, even Iowans working fulltime have struggled to stay out of poverty.
I had hoped that this year we would cut taxes for hard-working Iowa families so that they can better make ends meet. The House and Senate unanimously approved increasing a refundable state tax credit for low-income workers from 7 to 10 percent. For a cost of around $14 million, we could have helped 240,000 Iowa households with incomes below $45,000.
According to the Iowa Department of Revenue, about 60 percent of those who would have benefitted from an expanded Earned Income Tax Credit do pay Iowa income taxesóand that percentage goes way up when you include sales taxes, gas taxes, property taxes and other taxes.
Many of these families struggle to make ends meet despite working two or three jobs. The Earned Income Tax Credit provides extra income to help them pay for the rising costs of such needs as child care, groceries, doctor bills and home heating.
Studies show that this tax credit is the most effective anti-poverty program for working families. It also benefits local economies because almost every dollar is spent in Iowa, unlike other proposals for multi-million dollar tax cuts for out-of-state corporations.