The Senate

State of Iowa

Eighty-First General Assembly

STATEHOUSE

Des Moines, Iowa 50319

For Immediate Release Contact: Kimberly Steenhoek,

Tuesday, May 2, 2006 (515) 281-6571

Senate Approves $118 Million in Tax Relief for Iowa’s Seniors

Bill Eliminates taxes on Social Security and Increases Tax Exemptions on Retirement Income

DES MOINES – The Senate today voted 46 to 4 in favor of nearly $118 million in tax relief for Iowa’s seniors.

The bill, SF 2408, eliminates taxes on Social Security over eight years and allows more low-income and middle-income seniors to be exempt from paying state taxes on their retirement income.

“This bill provides seniors with needed financial relief,” said Sen. David Miller (R-Fairfield), the bill’s floor manager. “Many seniors live on a fixed income and their dollars are being stretched as prices for gasoline, food and utilities increase. Cutting taxes on Social Security and retirement benefits will give seniors more money to help pay for these basic necessities.”

When the tax exemptions take full effect in three years, single taxpayers with incomes of $24,000 or less and married couples earning $32,000 or less will be exempt from paying state income taxes.

Senate and House Republicans had insisted that tax cuts for seniors be included as part of the final budget package agreed to by the governor and legislative leaders.

“I am pleased that Republicans delivered on our pledge to cut taxes for seniors,” said Miller. “This bill sends a message that we value and appreciate our seniors. It will help keep our seniors from leaving Iowa for lower-tax states and taking their financial, philanthropic and civic contributions with them.”

The bill now goes to the House for consideration.

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