Monday, July 13, 2009

Guest Column by Senator Randy Feenstra

Democrats $56 Million Tax Hike is Politics as Usual

The Democrats eliminated major tax deductions and exemptions for Iowa flood and tornado victims in the 2009 legislative session. They also did away with the teachers tax deduction, college tuition assistance tax deduction, and the business depreciation tax deduction. These deductions put over $56 million back into the State General Fund.

The elimination of these deductions were never communicated to Iowa citizens or their accountants. The Democrats eliminated these deductions that have been available for years. The Democrats made the tax increases retroactive to the 2008 tax filings that were due April 15th. Iowans had no idea this tax increase was going to occur when they filed their 2008 return. Now the Department of Revenue has thousands of wrong tax returns and they are demanding payback for this tax money.

Since this tax hike was done under a cloak of secrecy due to political posturing under the claim of “we never raised taxes,” the Democrats find themselves in quandary.

To fix the problem, all Iowans who took these deductions must file an amended tax return or, hope they’re not audited which could result in a 5% tax penalty plus interest. The Iowa Department of Revenue has up to three years to identify these deduction errors and interest accrues until the money is paid. This becomes an expensive violation for something taxpayers did in good faith.

After Iowa taxpayers caught this political scheme, Governor Culver stated on Wednesday July 8th, that he would look at “any and all options” to address this snafu. The Vice Chair of the Senate Ways and Means Committee, Sen. Matt McCoy, noted the issue got knotted up with other tax proposals and stalled during the 2009 session.

Lets be crystal clear, this was done with no regard to Iowa taxpayers. I spoke on the floor of the Senate three times demanding that these deductions be passed for the flood victims, teachers, and businesses. I offered amendments to make sure these deductions were restored but got voted down by the Democrats. Every Democrat Senator knew the ramifications of not communicating this tax increase but they decided to play the political game of “We don’t think Iowa citizens are smart enough to catch this tax increase.”

It’s very disappointing when the Democrats call for government transparency but do things that contradict this very thought. Frankly, it seams the Democrats no longer care about Iowans; rather, for them it’s about winning elections at all costs. This is truly a failure in good government.
Senator Feenstra resides in Hull and sits on the Ways and Means, Education, Rebuild Iowa, and Appropriations Committees. He is also ranking member of the State Government Committee.