The non-partisan Tax Foundation released a lengthy evaluation of HF 2317, the largest income tax cut in Iowa history. Many terms have been used to describe the scope of the three recent income tax cut bills, whether it be historic, major, or transformative. All those terms work to illustrate this point made later by the Tax Foundation about just how dramatic the tax climate will improve in Iowa from 2018-2026:
Before the reforms of 2018 took effect, Iowa ranked 46th overall on our State Business Tax Climate Index, a measure of state tax structure. With the full phase-in of the newly enacted reforms, Iowa would rank 15th overall, an improvement of 31 places. This would tie North Carolina for the largest improvement in the Index’s history. In the wake of historic reforms beginning in 2013, North Carolina improved from 41st to 10th overall in seven years (currently 11th).
Not only the Tax Foundation took notice of the major changes to Iowa’s tax climate. The Platte Institute, a non-partisan, pro-growth organization in Nebraska also praised the tax relief package.
It noted the significant advantage Iowa will have over Nebraska in attracting jobs and people: “If Nebraska does nothing, a person paying our top tax rate will pay about 75% more tax on every extra dollar they earn compared to their peer in Iowa.” Perhaps the most compelling part of the Platte Institute’s analysis was this statement, “But what has set Iowa apart in recent years is simply having leaders who agreed to pursue ambitious goals and accomplish them.”