Senate Republicans have consistently set the goal of removing barriers to work, helping Iowans keep more of what they earn, and improving career opportunities. SF 576 continues that effort by phasing out the inheritance tax and eliminating revenue triggers holding back the implementation of the next round of tax cuts passed in 2018.
Iowa has some of the highest top tax rates in the country. Those tax rates are even worse because they are effective at a much lower income level than most states. SF 576 eliminates language in the largest tax cut in Iowa history, passed in 2018, to reduce and simplify Iowa income taxes contingent on a certain level of revenue received by the state and replaces it with a set date of January 1, 2023. It is time to implement tax relief for working Iowans and small businesses. Most small business pay the individual tax rate and are responsible for the creation of most new jobs in Iowa. Lower rates and the certainty of the effective date of those rates provides job creators an incentive to grow and create more opportunities for Iowans.
SF 576 also phases out the inheritance tax over a three-year period. The inheritance tax was eliminated years ago in Iowa on estates being passed from lineally, for example parent to child. However, the tax remained for other inheritance such as uncle to niece. Iowa is only one of six states to still have an inheritance tax. After a lifetime of paying tax on nearly every single transaction and activity in life, it’s finally time to say enough of government taxing Iowans beyond the grave.
