"[T]here are holes in some of these ideas. For example, our lawyer-governor still doesn't want to apply the sales tax to legal fees. So, he comes off looking like he's just trying to protect his own profession and donor base among trial lawyers. And these new sales taxes might be counterproductive to growth if they hurt the small businesses that buy these newly-taxed services, or prompt these services to move to other states.
Also, while eliminating federal deductibility and reducing income-tax rates would be revenue neutral to the state, it would hit different classes of taxpayers differently. Wealthier taxpayers would pay more, so Vilsack needs to tweak his plan so it's "revenue neutral" to taxpayers as well as government.
Once he fixes these flaws, Vilsack will have a balanced outline worthy of consideration. He has offered Republicans some important concessions, such as the elimination of the tax on pension income and a vote of the people on major tax increases. These are things many liberals and their special interests will oppose.
State 29 has had postings up on additional tax reform ideas here and here.
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