DES MOINES — Iowa Gov. Kim Reynolds said Monday she was in talks with legislative and industry leaders about further reducing Iowa’s income tax rates in the upcoming legislative session.
Reynolds promised another round of income tax cuts when she announced in September the state ended the fiscal year with a $1.83 billion budget surplus.
Speaking with reporters on Monday, Reynolds said she wants to make sure any tax reductions put in place will be sustainable in the long term.
“We’re spending a lot of time looking at the environment, watching what’s happening with inflation, and the impact that it’s having on our businesses in the state of Iowa,” she said.
Reynolds pointed to the surplus and the taxpayer relief fund, a separate fund that ended last year with $2.74 billion, as evidence that Iowa is collecting too much in taxes.
“We’ve got money there, and we’re going to turn it back to Iowans, and we need to be more competitive,” she said.
Reynolds and Republican leaders passed a tax overhaul in 2022 that set individual income taxes on a path to a flat 3.9% in 2026. Corporate income taxes will fall to a flat 5.5% by 2028 if revenue from corporate taxes hits certain benchmarks each year.
The law also eliminated the state tax on retirement income.
“I think Iowans are going to be very happy, early projections look really well,” Reynolds said. “(Iowans) are going to be happy with where we’re going to be able to go next year.”
Reynolds said she would have more details about the plan in her Condition of the State address in January. Iowa’s 2024 legislative session starts Jan. 8.
At a Cato Institute conference in February, Reynolds said her goal is to eliminate the state income tax by the end of her current term.
Iowa lawmakers did not make any changes to the state income tax during this year’s legislative session, but they passed a property tax law that constrained property tax growth and provided at least $100 million in property tax relief. The law passed with bipartisan support.
Republican legislative leaders have said they plan to pass further tax cuts next year. In a statement after Iowa’s budget surplus was announced in September, Senate Majority Leader Jack Whitver called for “bigger and bolder income tax cuts.”
“As long as I am Majority Leader, the Senate will continue to reduce taxes on Iowans and in the 2024 Legislative Session we will again work with Governor Reynolds and the House to achieve that goal,” Whitver said.
Legislative Democrats have warned that further income tax cuts will benefit large corporations and the wealthy at the expense of low-income and middle-class Iowans.
“While Gov. Reynolds is again slashing corporate taxes and promising more giveaways to come, middle-class families still aren’t getting ahead,” Iowa Sen. Janet Peterson, the ranking member of the Senate Appropriations Committee, said in September.
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Reynolds promised another round of income tax cuts when she announced in September the state ended the fiscal year with a $1.83 billion budget surplus.
Speaking with reporters on Monday, Reynolds said she wants to make sure any tax reductions put in place will be sustainable in the long term.
“We’re spending a lot of time looking at the environment, watching what’s happening with inflation, and the impact that it’s having on our businesses in the state of Iowa,” she said.
Reynolds pointed to the surplus and the taxpayer relief fund, a separate fund that ended last year with $2.74 billion, as evidence that Iowa is collecting too much in taxes.
“We’ve got money there, and we’re going to turn it back to Iowans, and we need to be more competitive,” she said.
Reynolds and Republican leaders passed a tax overhaul in 2022 that set individual income taxes on a path to a flat 3.9% in 2026. Corporate income taxes will fall to a flat 5.5% by 2028 if revenue from corporate taxes hits certain benchmarks each year.
The law also eliminated the state tax on retirement income.
“I think Iowans are going to be very happy, early projections look really well,” Reynolds said. “(Iowans) are going to be happy with where we’re going to be able to go next year.”
Reynolds said she would have more details about the plan in her Condition of the State address in January. Iowa’s 2024 legislative session starts Jan. 8.
At a Cato Institute conference in February, Reynolds said her goal is to eliminate the state income tax by the end of her current term.
Iowa lawmakers did not make any changes to the state income tax during this year’s legislative session, but they passed a property tax law that constrained property tax growth and provided at least $100 million in property tax relief. The law passed with bipartisan support.
Republican legislative leaders have said they plan to pass further tax cuts next year. In a statement after Iowa’s budget surplus was announced in September, Senate Majority Leader Jack Whitver called for “bigger and bolder income tax cuts.”
“As long as I am Majority Leader, the Senate will continue to reduce taxes on Iowans and in the 2024 Legislative Session we will again work with Governor Reynolds and the House to achieve that goal,” Whitver said.
Legislative Democrats have warned that further income tax cuts will benefit large corporations and the wealthy at the expense of low-income and middle-class Iowans.
“While Gov. Reynolds is again slashing corporate taxes and promising more giveaways to come, middle-class families still aren’t getting ahead,” Iowa Sen. Janet Peterson, the ranking member of the Senate Appropriations Committee, said in September.
Gov. Kim Reynolds: 'Iowans are going to be very happy' with future income tax cuts
Reynolds has promised another round of tax cuts after Iowa ended last fiscal year with a $1.83 billion budget surplus.
