From Sen. Zach Whiting’s newsletter:
Senate Republicans set course in 2017 to reduce the tax burden on hard-working Iowans. The reasoning was obvious: According to the Tax Foundation, Iowa’s tax climate ranked 42nd in the nation. Senate Republicans understand those states experiencing the most significant economic growth have the lowest income tax rates in the nation.
Guided by our pro-growth agenda, the Legislature passed a tax bill that provided an average income tax reduction of 10 percent immediately, and by 2023 the top tax rate will be reduced to 6.5 percent. Going into the 2020 legislative session, we are committed to keep lowering the tax burden on Iowans. We are hopeful Iowans will receive additional income tax reductions as a result of our work over the next 100 days.
During her Condition of the State speech this week, Governor Reynolds announced her plan for tax relief. Iowa currently has nine tax brackets, with a top rate of 8.53 percent in tax year 2021. Under Governor Reynolds’ plan, she is proposing to raise the sales tax one percent, build off of our earlier tax reduction success to further reduce income taxes, and bring our top tax rate down to 5.5 percent by tax year 2023. The change would cut income tax by an additional 10 percent for many Iowans, with lower-income Iowans receiving up to a 25 percent cut, according the governor.
Senate Republicans will be working in the weeks and months ahead to ensure a significant net tax reduction for Iowans.