Sen. Chuck Grassley said he is taking a big-picture approach to a “once-in-a-generation” opportunity to change the federal tax code.
The Iowa Republican has heard from “a lot of people back home on various programs, tax credits, above the line deductions,” he said Wednesday.
He said he’s willing to argue for maintaining many of those provisions, such as a proposal to double from $500 to $1,000 the deduction teachers can claim for out-of-pocket classroom supplies. One study found teachers spend an average of $945 a year on classroom supplies, instructional materials and school supplies.
“I’ve told people that if I agree with it, I would argue for it” — up to a point, he said.
He’ll argue for those provisions in committee discussions, “but if we can’t preserve it, if my position doesn’t get a majority, then I’m going to vote for the bill anyway,” Grassley said during his weekly conference call with reporters.
That’s because he believes that over the 30 years since the last rewrite, it has become “so complex, and you only get about a once-in-a-generation opportunity to change the tax code,” Grassley said.
His goal is legislation cutting taxes, simplifying the tax code “or maybe you might want to call it tax reform.” Grassley believes the Senate proposal will stimulate business activity and provide tax relief to middle- and lower-income Iowans.
The plan is to simplify the code so most Iowans will be able to file their income taxes on a single sheet of paper, reduce the brackets from seven to four, double the standard deduction to $24,000 and the child care credit to $2,000, he said.
The changes would reduce the number of Americans who have to file income taxes by a few million, Grassley said. Many low- and middle-income taxpayers would benefit from cuts in corporate taxes, he said, intended to grow the economy, create jobs and raise wages,
The Tax Foundation, a Washington think tank, has estimated the combination of lower taxes and higher wages could result in a 26 percent increase in income for Iowans, Grassley said.
Eliminating the estate tax would benefit farmers and small business owners, Grassley said. He doesn’t think the current estate tax would affect his family farm.