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After signing the most significant tax relief legislation in state history and cutting taxes for every Iowan yesterday, Governor Kim Reynolds made Iowa proud when she gave the Republican response to President Biden’s State of the Union address.

In addition to addressing reckless government spending and harmful restrictions and policies of the Biden administration, Reynolds said, “You shouldn’t have to wake up every morning and worry about the next thing the government is going to do to you, your business, or your children.”


Then, our governor shared with the nation what we already know: Iowa is accomplishing a generational change in how much state government takes from taxpayers.

When fully implemented, the tax reform will:

  • Create a 3.9% flat individual income tax rate
  • Eliminate state income taxes on retirement income
  • Set a path to reduce the corporate income tax from 9.8% to 5.5%
  • Phase-out special tax incentives in the corporate tax code

Individual income tax rates will be reduced as follows:

  • 6.0 percent (2023)
  • 5.7 percent (2024)
  • 4.82 percent (2025)
  • 3.9 percent (2026)

Governor Reynolds said, “When I took office, Iowa had the sixth-highest individual income tax rate in the nation at 8.98%. I believed Iowans deserved better. With this bill, Iowa is now the fourth lowest for individual income tax rate in the nation.”

Senate Majority Leader Jack Whitver added, “This tax bill is the third major tax relief package the Senate has delivered in the last four years. A nearly $1.9 billion tax cut creates an environment for more career opportunities for Iowans, gives Iowans more of an incentive to rejoin the workforce, and helps Iowans weather the impact of record-setting inflation created by the reckless policies coming from Washington, D.C.”

House Speaker Pat Grassley offered encouraging words about what the future might hold, “We look forward to, after we’re all reelected, to doing this again moving forward.”

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