Accountants react to Governor's proposed tax cut - KWWL - Eastern Iowa Breaking News, Weather, Closings

Accountants react to Governor's proposed tax cut

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Governor Kim Reynolds is proposing a $1.7 Billion tax cut that's aimed at helping middle-income Iowans and small business owners.

Experts say it's too early to determine how the governor's proposal would affect the state's economy.

Governor Reynolds released a plan Tuesday to cut the state's income taxes, with a promise to simplify tax code.

Loy Hancock & Associates C.P.A. Michael Hancock says he'll be keeping a close eye on the proposal, in case it becomes law.

"It's stating it's going to help lower-to-middle class people. It's tax cuts around that area. It's not touching any of the corporate credits that are going on right now, which is a big deal for the budget concerns that they're having, and it's going to try to make up the revenues, because any time there's a cut, there needs to be an increase somewhere else...," Hancock said.

Part of the governor's proposal is to beef up collection of on-line sales taxes.

Hancock says he's not sure how that would work.

"Do we tax based on where it's being shipped or where it's being shipped from? That's often a concern, but it's a matter of 'how do we practically collect this?'," Hancock asked.

Also, Hancock said he's not sure whether the governor's proposed cuts will benefit Iowa's economy.

"The idea is if there's more money in the lower to middle classes, spending will go up. That's always the idea. Whether that happens or not is always the big question," Hancock said.

Hancock said more people seem to be concerned how the President's tax plan will affect them this year, while they're keeping an eye on the governor's plan for the year ahead.

"It's something that we always look forward to, but then again I can't say that I've ever heard a politician propose a tax bill that doesn't say it's going to help the lower to middle income class," Hancock said.

Michael Hancock said that aside from the governor's proposal, President Trump's tax plan is the biggest change in tax code, he's seen since the Affordable Care Act.

If you'd like to review the governor's full proposal, you can click here.

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