Iowa Gov. Culver calls for middle-class tax cut

AP News
Posted: Oct 19, 2010 7:45 PM
Iowa Gov. Culver calls for middle-class tax cut

Gov. Chet Culver called Tuesday for a $120 million middle-class tax cut that he said would help most Iowa residents and stood in contrast to Republican Terry Branstad's proposed business tax breaks.

Culver proposed cutting income taxes for individuals making less than $100,000 annually and couples earning less than $200,000. The Democratic governor said his plan would reduce taxes for 980,000 of the state's 1.5 million tax filers.

His plan, which came two weeks before the Nov. 2 election, takes a different approach than is favored by Branstad, a former four-term governor who has repeatedly called for cutting corporate income taxes in half and making deep reductions in business property taxes.

"We're focused on middle-class tax relief while Terry Branstad is focused on corporate tax cuts," said Culver.

Culver said the state can afford his proposed tax cut because revised revenue forecasts indicate that Iowa will collect $300 million more in taxes than initially projected for the current budget year.

"Thanks to our conservative fiscal management and growing economy, the state will take in more money this year than what was expected," said Culver. "It's only fair that we give some of this money back."

Branstad spokesman Tim Albrecht says Culver's proposal was an effort to pit Iowa residents against one another.

"It's unfortunate that every time Chet Culver comes out with a new policy proposal it's always trying to divide Iowans," Albrecht said

Culver announced his plan at the Des Moines home of Joe and Libby Crimmings, noting that they would save about $180 under his proposal.

Culver said it's only his latest idea for easing taxes on working families. He said he'd previously pushed to increase the earned income tax credit, which is available to low-income families, and supported the exemption of federal stimulus checks from state taxes.

"My administration has done whatever it could to help middle-class families," said Culver.

Culver said he's discussed his latest proposal with legislative leaders, who are willing to support it when the Legislature convenes in January. That will depend, however, on Culver winning another term as governor and Democrats retaining control of the state House and Senate.