Historic Opportunity For Iowa To Repeal Income Tax

The last few years have been historic years for state tax reform. The Tax Foundation reports that 43 states have passed some form of tax reform in 2021 or 2022.

Eliminate Income Tax ( Photo: Dept.org )

Hawkeye State must continue to lead in growth-promoting, family-oriented economic policies

In 2023, many states will continue this historic trend. Patrick Gleason, vice president of government affairs for Americas for Tax Reform, called it the “golden age of federal tax cuts.” Now, by phasing out the income tax, Iowa has an opportunity to build on its past good work in this area. These include the Universal School Choice Act, which Congress passed earlier this year, and the 2022 Tax Reform Act.

The 2022 tax reform measures will be the biggest tax cuts in state history

The corporate tax rate will be reduced until it reaches 5.5% across the board after the revenue is activated. The measure will replace the nine-tier progressive income tax with a top rate of 8.53%, with a gradual reduction until a flat rate of 3.9% is introduced in 2026. States compete for jobs and talent, and increased labor mobility makes low-tax states even more attractive. Iowa knows this and is doing everything in its power to be one of the low-tax states. Lawmakers have yet to pass Senator Dawson’s income tax reform bill, but further income tax reform is almost certain to be a major agenda item for the next Congress in 2024. Hawkeye must continue to lead this golden age of state tax cuts.

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