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Governor signs $1 billion cut in Iowa income taxes
Governor Reynolds signs latest income tax cut into law on May 1, 2024. (RI photo)
Governor Kim Reynolds has approved the plan that will shrink Iowa’s individual income tax to a single rate of 3.8% next year. Lawmakers say it will amount to a billion dollar cut in state income taxes.
“When I took office, Iowa’s personal income tax rate was the sixth highest in the nation at 8.98%. I think we had nine brackets and the list could go on and on. It was certainly clear that we needed to make a change,” Reynolds said. “And that’s exactly what we’ve done.”
Reynolds signed an income tax cut in 2018 that was billed as the largest in state history. This is the fifth time she’s approved legislation that reduces income taxes. A group of Republican lawmakers and a few lobbyists joined the governor for a bill signing ceremony in her statehouse office.
“All of the tax cuts that we’ve enacted through the legislature and signing into law since 2018 will save Iowans nearly $24 billion over a decade, running through Fiscal Year 2030. Should I say that one more time?” Reynolds asked, laughing as the crowd applauded.
Two years ago, the governor signed a bill that eliminated the state income tax on retirement income and whittled down the corporate income tax rate. Last year, a plan to contain property tax growth become law. “Simply put, we’ve comprehensively transformed our tax code and dramatically increased our competitiveness within a few short years,” Reynolds said.
Democrats who have opposed the tax cuts say Republicans are prioritizing cuts for wealthy Iowans and corporations, while cutting tax revenue to the point the state will be unable to support schools and other priorities.
