Iowa’s Next Tax-Reform Opportunity: Jonathan Williams in National Review
"In 2022, Iowa confirmed its position as a leader in the state flat-tax revolution by phasing out the nine-bracket progressive income tax and replacing it with what will ultimately be a 3.9 percent flat tax in 2026."
In his latest op-ed with John Hendrickson of Iowans for Tax Relief, ALEC EVP of Policy and Chief Economist Jonathan Williams detailed the current pro-growth tax reform proposals in Iowa.
Gov. Reynolds is proposing to accelerate the rate of income-tax reductions and even lower the flat tax to 3.65 percent this year. The rate would be reduced to a flat 3.5 percent in 2025 — amounting to a $3.8 billion savings for taxpayers over the next five years.
State senator Dan Dawson and state representative Bobby Kaufmann, each of whom serves as chair of his chamber’s Ways and Means Committee, have also introduced an important tax-reform proposal. The proposal similarly calls for accelerating income-tax-rate reductions, but it also creates a path that will not only continue to lower the rate but eventually eliminate the income tax altogether.
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As Iowa’s house speaker pro-tem, John Wills, put it, “I look forward to continuing the great strides Iowa has made to protect hardworking taxpayers. By investing our historic surplus to buy down and eventually eliminate the income tax, we can responsibly balance the need for core government services and the need to make Iowa more competitive for job growth.”
This year presents a historic opportunity for policy-makers to enact significant pro-growth tax reform that will not only allow taxpayers to keep more of their hard-earned income and make the state more competitive but also create constitutional protections that will benefit taxpayers for generations.