GOP leaders prioritize eliminating income tax to address workforce shortage

By: - December 8, 2021 2:09 pm

Iowa Republicans are considering a plan to eliminate income taxes in the state. (Photo by Giorgio Trovato via Unsplash)

Legislative leaders told a group of business executives Wednesday that addressing Iowa’s workforce shortage is a top priority in the upcoming legislative session, even as lawmakers disagreed over what might solve the crisis.

In an hour-long discussion hosted by the Greater Des Moines Partnership, political leaders from both parties volleyed possible solutions to the worker shortage, including lower taxes, investments into recreation and culture, and more childcare and housing for working families.

Fewer Iowans are working today than in late 2019, before the COVID-19 pandemic hit the United States. This October, the most recent month with data, 1.66 million Iowans were in the labor force, either employed or actively looking for work. In October of 2019, 1.74 million Iowans were participating in the labor force.

Senate President Pro Tempore Brad Zaun, R-Urbandale, and Rep. Brent Siegrist, R-Council Bluffs, highlighted their plan to eliminate the state income tax as a boon for Iowa companies and workers. After signing a major tax cut earlier this year, Gov. Kim Reynolds signaled that she was open to cutting income taxes to stay competitive with states that had fully eliminated income tax.

“The priority of Senate Republicans is to eliminate income tax in the state of Iowa. I do believe that would probably be one of the biggest tools to attract people to Iowa, if we can get that done,” said Zaun, though he noted the change is “not going to happen overnight.”

Siegrist said that lawmakers may also consider corporate tax cuts, but that removing the income tax was a higher priority. 

Democrats on the panel were skeptical about eliminating the income tax, pointing to inflation and raising concerns that higher sales taxes would disproportionately affect low-income Iowans.

“It’s going to be hard to try to lower the corporate tax rate, abolish the income tax and pass a sales tax increase at a time when prices are already high for consumers,” said Senate Minority Leader Zach Wahls, D-Coralville. 

Zaun and Siegrist said that sales tax increases are unlikely to pass in the 2022 legislative session, which begins next month. Zaun suggested that the state may instead remove some tax cuts to make up for the lost revenue from income taxes.

Democrats also took aim at Republicans for focusing on “divisive sociocultural issues,” arguing the controversies might dissuade young people from moving to or staying in the state. Wahls pointed to recent school board controversies over prohibiting some books with explicit scenes in school libraries.

“Iowa’s brand gets damaged when stories are out there about things that fringe elements in the state are doing or proposing,” said House Minority Leader Jennifer Konfrst, D-Windsor Heights.

Zaun responded that the books in question were “garbage” and amounted to “child pornography.”

On several other issues, the Republican and Democratic leaders agreed broadly on their importance. Both parties recognized the need for more broadband investments, childcare and improvements to water quality.

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Katie Akin
Katie Akin

Reporter Katie Akin began her career as an intern at PolitiFact, debunking viral fake news and fact-checking state and national politicians. She moved to Iowa in 2019 for a politics internship at the Des Moines Register, where she assisted with Iowa Caucus coverage, multimedia projects and the Register’s Iowa Poll. She became the Register’s retail reporter in early 2020, chronicling the impact of the COVID-19 pandemic on Central Iowa’s restaurants and retailers.