The 2022 Iowa legislative session starts next Monday and Governor Kim Reynolds and her fellow Republicans in the House and Senate are putting tax cuts the top of their agenda.
“We’re shooting to make another big reduction in the taxes that Iowans pay,” Senate Majority Leader Jack Whitver, a Republican from Ankeny, told Radio Iowa, “and we want to continue to make us one of the most competitive states in the country.”
Whitver and Governor Reynolds say their goal is a “generational” tax change, with their ultimate goal being the elimination of the Iowa income tax.
“Iowa is really in a strong position and that’s after record investments in foundational priorities, tax cuts,” Reynolds said in December during an online forum. “We still have a significant, healthy balance that we’ve over-collected and it’s time to turn that money back to the taxpayers.”
That’s a reference to the more than $1 billion currently in the state’s Taxpayer Relief Fund. It’s the accumulation of tax payments that were way above official estimates over the past couple of years. House Speaker Pat Grassley said that money should be returned to Iowans “as quickly as possible,” and the plan should not pick winners and losers.
“I don’t think we need some huge, complex tax conversation,” Grassley told Radio Iowa. “I think we can do this in a way that we give significant relief and do it so we all understand it and Iowans understand it.”
House Minority Leader Jennifer Konfrst of Windsor Heights said she and her fellow Democrats will release their own tax plan, “to make sure that any kind of a tax cut helps middle class families the most,” Konfrst said during an interview with Radio Iowa.
Zach Wahls of Coralville, the Democratic leader in the Iowa Senate, said Republicans wouldn’t have been able to cut taxes if the federal government hadn’t provided Iowa with a sizable amount of pandemic relief.
“The idea that we’re going to spend these one time dollars on a permanent elimination of the income tax — it’s like drilling a hole in a sinking boat,” Wahls told Radio Iowa. “It doesn’t make sense.”
The official estimate for the current fiscal year indicates just over half of the total or “gross” taxes paid to the State of Iowa will come from personal income taxes.