Citations

Iowa’s tax structure has long favored the wealthiest Iowans and corporations, and tax cuts passed in 2022 are making inequities worse. The average millionaire will see a cut of $62,000 a year. In the middle, Iowans earning $40,000 to $60,000 will see an average cut of $300, or about $6 a week. Most with incomes under $40,000 will see no cut at all. 

Iowans have traditionally valued expanding opportunity, caring for neighbors and a strong sense of fair play. Tax-cut proposals at the Iowa Statehouse from Governor Kim Reynolds and legislative leaders turn these Iowa values upside down. They would drastically restrict revenue needed to fund critical services such as education, health care, public safety and environmental quality. The Senate bill, SSB 3141, would set out to fully eliminate the income tax, which until recently has funded roughly half of the state budget. By targeting benefits to the wealthiest Iowans, the plans would throw an already inequitable tax system further out of balance.

The income tax is a way Iowans come together to lay strong foundations that create opportunity and help people thrive. Governor Reynolds and legislative leaders want to eliminate Iowa’s personal income tax — a virtual promise to decimate the services that make Iowa a better place to live, work and raise a family. Read more.

Iowa lawmakers have repeatedly cut taxes over the last three decades in ways that provide the greatest benefits to the highest-income taxpayers while ratcheting down investments that historically made the state attractive to raise a family or do business — including public schools and public health. Now, within months of passing tax cuts that when […]

Iowa taxes its middle- and low-income families more as a share of income than it does wealthy families, a long-term trend worsened by the 2018 tax overhaul. The latest “Who Pays” report by the Washington-based Institute on Taxation and Economic Policy (ITEP), again shows the effect of sales taxes and property taxes on lower-income households tilts Iowa’s overall tax system so the poorest pay the highest percentage in taxes.

As Iowa lawmakers consider the agreed-upon tax plan developed by Republican leadership and Governor Reynolds, sharp differences are clear from earlier proposals by the Governor and the House Ways and Means Committee.

IFP's Tax Policy Kit offers resources for the public, advocates and policy makers who want to better understand the stakes — and sort away the spin — on state tax debates.

The tax bill that recently passed the Iowa Senate included a provision from the recent federal tax cut bill that provides preferential tax treatment for certain kinds of business income earned mostly by the highest income taxpayers. The “Qualified Business Income Deduction” (QBID) provides a 20 percent exemption of that income from the personal income tax.

The tax bill that recently passed the Iowa Senate included a provision from the recent federal tax cut bill that provides preferential tax treatment for certain kinds of business income earned mostly by the highest income taxpayers. The “Qualified Business Income Deduction” (QBID) provides a 20 percent exemption of that income from the personal income […]

Iowa’s General Assembly opened with promises from legislative leadership and the Governor for tax reform. We noted key opportunities to assure a fairer and sustainable system in a brief report last fall, “Introduction to 2018: What should be part of tax reform? And what should not?”[i] These options remain; some are gaining attention — such as the elimination of federal deductibility and the closing of sales tax loopholes — and some are not.

Governor Kim Reynolds’ tax proposal trades massive cuts in public services for small savings for lower-income taxpayers, larger savings for high-income taxpayers and few meaningful strides toward fairness in a system that already treats the poor poorly and raises too little revenue to avoid mid-year cuts.