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Iowa Democrats announce details of their tax proposal in response to Republican plans

Democratic leaders say their plan will cut taxes for the middle class instead of corporations and millionaires.

DES MOINES, Iowa — Iowa lawmakers must now grapple with a fourth potential tax plan after democrats released their proposal Thursday.

House Minority Leader Jennifer Konfrst (D-Windsor Heights) said the plan won't give tax breaks to corporations, millionaires or special interests, taking aim at proposals by Gov. Kim Reynolds and Republican leaders.

"Our fair tax plan will put more money back in the pockets of working Iowans by lowering income tax rates for the middle class by expanding the Child and Dependent Care Tax Credit," Konfrst said.

Someone making $40,000 a year would receive $600 toward child care costs, Konfrst added. The plan would also cut income tax for Iowans already in the workforce.

"That means doubling the Earned Income Tax Credit," Konfrst said. "For example, a small a single mom with three kids working two jobs would get as much as an additional $6,600 a year."

Speaker of the House Pat Grassley (R-New Hartford) said lawmakers in past years already worked to increase eligibility for the Earned Income Tax Credit. 

"I think our focus is going to continue to be on the personal income tax side along with those two retirement pieces from the governor's bill," Grassley said.

Democrats are also taking aim at corporate tax cuts in plans by both Senate Republicans and the governor, saying they believe there's a better use of those dollars.

"We're calling for boosting basic funding for Iowa's public schools by $300 million," said Senate Minority Leader Zach Wahls (D-Coralville). "Which we believe is a better investment in the state's future than the Republican plan for another $300 million in corporate tax cuts."

While House Republicans aren't calling for corporate tax breaks, Grassley said a significant amount of the state's budget already goes toward education.

"We're basically at 50% of the entire state's budget funds K-12 education, and there are other pressures within the budget that, regardless of what revenue does, continue to grow," he said.

Democrats say their plan will be rolled out through several amendments in each chamber.

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