Des Moines, Iowa — Governor Kim Reynolds has signed the bill that flattens Iowa’s personal income tax rate to 3.9% by 2026.
Reynolds signed the bill Tuesday afternoon. The new law exempts all retirement income from state taxes. It also provides new tax breaks for retired farmers and for people who retire from employee-owned companies.
If certain revenue targets are met, the plan could lower the corporate income tax rate by more than 40 percent. Reynolds has been governor since May of 2017. This is the third time she’s signed a bill designed to cut taxes, including last year’s bill that eliminated the state inheritance tax and sped up a series of tax cuts Reynolds approved in 2018.
House Speaker Pat Grassley, a Republican from New Hartford, spoke after Reynolds and picked up on that theme.
Senate Majority Leader Jack Whitver, a Republican from Ankeny, says Republicans promised they’d pursue this path if voters gave the GOP majority control of the Senate, alongside the Republican governor and Republican-led House.
Dozens of Republican legislators joined Reynolds for the bill signing ceremony. Reynolds thanked Whitver and Grassley for their partnership as she handed them pens she’d used to sign her name on the official copy of the legislation. Democrats say the bill gets rid of Iowa’s progressive tax system and provides a tax break to the wealthiest Iowans that will be 100 times greater than what middle income Iowans will get. Senate Minority Leader Zach Wahls is a Democrat from Coralville.
House Minority Leader Jennifer Konfrst, a Democrat from Windsor Heights, says Reynolds is governing to raise her national profile, not to do what’s best for Iowans.
