Ronald Reagan once said, “Republicans believe every day is the Fourth of July, but the Democrats believe every day is April 15.” While I will always enjoy celebrating Independence Day more than April 15, we have been passing historic tax relief legislation year after year to ensure Tax Day is less and less of a burden to hard-working Iowans and also ensure more money would be kept in the pockets of the people who earned it.
In 2018, we passed our first historic tax relief plan, prioritizing Iowa’s middle-class families, taking the first steps in simplifying Iowa’s tax code, and bringing down our state’s income tax rate. Property tax relief was a focus in 2019 when the legislature passed legislation increasing transparency in the property tax process and made local governments more accountable to taxpayers. In 2021 we passed tax relief for small businesses, eliminated the inheritance tax, and eliminated a property tax levy to help provide property tax relief for Iowa property taxpayers.
Finally, last year we passed our most recent historic tax relief package, flattening Iowa’s income tax to 3.9 percent for all Iowans and eliminating the tax on pensions and retirement income. Before this legislation was signed into law, Iowa had one of the highest income tax rates in the country. Once the flat tax is fully implemented, Iowa will have the fourth lowest income tax rate in the United States. This legislation started going into effect this year. As of January 1, retirement income was exempt from the income tax. The top income bracket was also lowered this year. It is now at 6 percent. Income tax rates will be lowered each year for the next few years until we reach a 3.9 percent flat rate.
Tax relief and Iowans keeping more of what they earn is continual focus for Senate Republicans. We are proud of the accomplishments we have had on taxes over the years and the positive effects for Iowa families.