Iowans often dread this week every year because it brings about the deadline for the filing of federal income taxes. Yet, this year thousands of Iowans from communities all over the state decided to commemorate this annual occurrence by hosting tea parties to protest the unbridled spending that has occurred both at the federal level but especially here in Iowa where we have grown government’s budget during the last two years. Well over a 1500 Iowans gathered to send a message to stop the overspending and to dump the plans to enact additional burdensome new tax increases. Just as Iowans all over the state are writing checks to the federal and state government for their taxes and heading to tea parties, the federal deductibility elimination still looms over our heads. The plan would force Iowans to pay a tax on a tax by eliminating federal deductibility and would severely cripple the creation of new jobs because of the higher taxes that would be imposed. Under the revised proposal, many Iowans will see their taxes increase: In 2009, 59% of the filers who make less than $70,000 will see their taxes increase. In 2010, 53% of the filers who make less than $70,000 will see their taxes increase. In 2011, 55% of the filers who make less than $70,000 will see their taxes increase. In 2012, 53% of the filers who make less than $70,000 will see their taxes increase. In 2013, 52% of the filers who make less than $70,000 will see their taxes increase. While the bill in tax years 2009 and 2010 are no longer revenue neutral, it offers small tax cuts statewide. But, it eventually goes bad. In tax year 2011, the bill will impose a $154 million tax increase on Iowans. A Department of Revenue analysis shows that it will provide small tax cuts in tax years 2009 and 2010, and will increase taxes beginning in 2011. The department estimates a $20 million decrease in tax year 2009 and a $35 million dollar decrease in 2010. It also estimates a $154 million increase in tax year 2011, a $157 million dollar increase in tax year 2012, and a $149 million tax increase in tax year 2013. This represents an overall tax increase of over $400 million on Iowans. This tax on a tax legislation has been in front of lawmakers and the people of Iowa for several weeks now and the response of the people has been an overwhelming “No”. I have heard from hundreds of Iowans regarding this tax increase scheme and I will continue to stand on the side of the taxpayers of Iowa by opposing this and other tax increase bills being pushed. While this time of year means tax season for Iowa taxpayers, it also means the nearing of the end of the legislative session and that means lawmakers are busy crafting next year’s state budget. We have been forced to significantly scale back earlier budget plans. When the Legislature finally does adjourn, the current budget being crafted will still be among the largest in state history thus reinforcing the fact that Iowa is facing a spending problem – not a revenue problem. Bio-diesel Update On Wednesday, April 15, the Senate passed SF 464 a bill mandating the sale of bio-diesel in Iowa. The legislation stated that beginning in September of this year all diesel fuel sold in Iowa must have at least a 5% blend of bio-diesel, either made from soybeans or animal fat. While the bill removes tax credits for retailers selling B-2 or B-5 blended biodiesel in Iowa, the legislation establishes a 3 cent per gallon tax credit for retailers who sell B-10 or higher blended bio-fuel. There are exceptions in the bill for nuclear power plants, railroad locomotives, airport vehicles and backup generators. The bill also allows the Governor to issue a bio-diesel suspension order for the following reasons: Lack of distribution infrastructure Shortage of biodiesel blended fuel Market changes or prices that cause economic hardship to the state Various attempts to remove the mandate and replace it with tax credits and tax cuts failed during debate. The bill now moves to the House of Representatives for further consideration. One thing is for sure, as the session draws to a close, anything can and does happen. There is a good chance the session will be over by the middle of next week. So, for now, be safe and enjoy the wonderful Iowa Spring. As always, your questions and comments are always welcome. Thank you for letting me represent you at the capitol. Please feel free to contact me: tim.kapucian@legis.state.ia.us or 515 281-3371.

Senator Tim Kapucian Grundy, Tama, Benton & Iowa Counties