Tom Vilsack on Tax Reform
Democratic IA Governor
Embraces middle-class tax cuts
While Vilsack has been a leader in the centrist Democratic Leadership Council, the middle-class tax cuts and push toward a balanced budget that the DLC pushes have become so mainstream and embraced by so many
Democrats that those ideas were part of the six-part “New Direction” that congressional Democrats will act on when they take control in January.
Source: Perry Bacon Jr. in Time Magazine
Nov 30, 2006
Support growth measure but not accompanying tax cuts
The Iowa Supreme Court ruled Wednesday that Vilsack violated the constitution by using line-item vetoes to yank tax cuts and regulatory changes from a 2003 bill creating the Grow Iowa Values Fund. The ruling invalidates House File 692, which created the
governing framework for the $503 million values fund. A separate bill signed by Vilsack authorized dollars to fill the values fund. But HF 692 also contained a $311 million income tax cut and pro-business regulatory reforms that Vilsack vetoed.
Source: Journal Des Moines Bureau
Jun 17, 2004
No national sales tax or VAT.
Vilsack adopted the National Governors Association policy:
State tax policy is closely linked to federal policy. 36 states currently use either federal income or federal tax liability as the state tax base for personal income taxes. It is critical that Congress and the administration do not enact tax reform in a vacuum, but in consultation and in partnership with the nation’s Governors.
Source: NGA Executive Committee Policy Statement EC-9 00-NGA1 on Feb 15, 2000
- National Sales or Value-Added Tax The nation’s Governors oppose a national sales or transactional value-added tax. Such taxes would intrude into a tax area that has traditionally been reserved for and relied on by state and local governments. If enacted, either of these taxes would seriously threaten the ability of state and local governments to maintain their tax base.
- Current Income Tax If Congress decides to reform the current tax system, they should reduce the complexity of current income taxes; increase incentives to work, save, and invest; and increase efficiency and fairness. As part of any reform of the
current income tax, the nation’s Governors would oppose any modification to the deductibility of state income taxes, property taxes, and the interest on state and local bonds.
- Transition If major tax reform is enacted, it should not be implemented for at least three years, to give states ample time to adjust their own tax systems.
- Information Needs of the StatesThe ability of states to tax various revenue sources depends to a large extent on information that only the federal government can collect. This is becoming much more important given the complexity of both the international and domestic economies in tracing where goods and income are generated. It is critical that the federal government separate tax reform per se from the information that is collected from individuals, businesses, and corporations with respect to income generated. The data collection role of the federal government must be developed in partnership with state and local governments.
Let states independently determine estate taxes.
Vilsack adopted a letter to Congressional leaders from 37 Governors:
We are writing to request equal treatment between states and the federal government on estate tax changes. Regardless of one’s view about phasing out the federal estate tax, the Governors are absolutely united in opposing any action that would discriminate against states in the phase-out of the state and federal estate taxes. This issue needs to be addressed before the Senate goes to conference with the House.
Governors believe that the ability of states to independently determine their own tax revenue policy is a basic tenet of federalism. Moreover, no federal tax bill should be enacted without close consultation with the states.
At the very least, there must be equity in the treatment of the state death tax credit in the tax bill the Congress considers with the proposed phase-out of the federal estate tax. Governors oppose provisions that impose disproportionate impacts on state revenue systems. The changes proposed by the Senate would have abrupt, significant adverse impacts on state revenues at a particularly onerous time for many states. The potential impact on states would begin next year and have a potential impact of between $50 and $100 billion over the next ten years.
We urge the leaders to respect those rights and to restore fairness.
Source: National Governor's Association letter to Congress 01-NGA19 on May 23, 2001
Page last updated: Feb 08, 2010