State Lawmakers Push Competing Tax Proposals

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By Jay Knoll

DES MOINES, Iowa (AP) - Iowa lawmakers are advancing competing income tax reduction plans in the Republican-majority House and Democratic-controlled Senate and a compromise deal is not yet clear.

The House on Wednesday passed a bill to offer a flat income tax option. Under their legislation, residents could pay a 4.5 percent state tax on income instead of the current progressive tax rates. Most deductions and credits wouldn't be available to those paying the flat tax.

A Senate committee approved legislation Monday that would provide more tax credits to low income residents.

Lawmakers say they will work to find middle ground, but it wasn't clear what that could be. Republicans say their proposal would provide tax cuts to more people. But Democrats say the Republican plan provides bigger breaks to top earners.

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