DES MOINES, Iowa (KCAU) — Governor Kim Reynolds’ income tax bill is here with a lot of focus on individual income tax rates.
Senate Study Bill 3044 is the official name of the plan at the moment. A portion of the bill is dedicated to corporate income tax rates. Governor Reynolds is wanting to gradually lower the tax rate to 5.5% eventually, once corporations in the top tax bracket generate $700 million in income tax combined in a fiscal year. The current tax law has the income tax rate for corporations spread out in four different brackets, with percentages increasing as income does.
Speaker of the Iowa House of Representatives Pat Grassley told reporters on Thursday that the focus of tax legislation will be on individual income tax.
“As a Republican, we are always going to be looking at how we can lower the tax burden, I do not want to lose focus of this plan is going to be the individual tax income piece,” said State Representative Grassley (R) from New Hartford. “I am hopeful that we can come out with a bill as soon as possible that will include and show that is where our focus is.”
Democratic leaders in the statehouse are the top dissenters to more corporate tax cuts in this plan. They say that this is a $300 million tax cut for corporations and it doesn’t solve the problem.
“The reality is the biggest issue facing Iowa employers is not the corporate tax, right, it is the Reynolds workforce crisis,” said State Senator Zach Wahls (D) from Coralville. “If corporate tax cuts would solve the problems businesses are facing in Iowa there wouldn’t be any issues in Iowa.”
Grassley wants it to be clear that the priority of this session will be passing individual income tax reform and that they will use the Governor’s bill to help reach their tax cut goal.
“We are going to work off the Governor’s bill but again I don’t think that we are in a position where every single piece of that is agreed to by any means,” said Grassley. “But what we are focused on now is how we can lower that individual tax rate like we have been talking about for the last two months.”
Reynolds’ plan is to get individual income tax rates down to 4% by 2026. There should be movement soon with tax legislation according to Speaker Grassley.