A tax cut for every Iowan

To the Editor,

     Because of the responsible budgeting decisions the Iowa Legislature has made, and because of the leadership from Governor Kim Reynolds, Iowa’s economy is strong. So strong that we have a historic opportunity in front of us.

     With a billion-dollar surplus, another billion in the Taxpayer Relief Fund, and our rainy-day fund and cash reserves full, we are able to deliver the largest tax cut in Iowa history while continuing to fund Iowans’ priorities.

     Last week, as Chair of the Ways & Means Committee, I ran a bill on the Iowa House floor that would cut taxes for every Iowan. The bill passed the House and the Senate, and on Tuesday, March 1, the Governor signed it into law.

     A couple of things about this tax cut bill make me very proud. First, this tax cut lowers income taxes to a fair and flat rate of 3.9 percent for every Iowan. Right now, the lowest income tax bracket pays an income tax rate of 4.4 percent. Therefore, every Iowan will have more money in their pockets thanks to this tax cut.

     Additionally, it makes all retirement income tax exempt and creates a new tax credit option for retired farmers. There are a variety of reasons folks may want to retire to another state, but taxes shouldn’t be one of them. This change means more Iowans will be able to stay Iowans, rather than become Floridians or Illinoisans because of this bill.

     This bill also includes changes to Refundable Corporate Tax Credits that Iowa House Republicans have wanted to reform for years. This bill will lower refundability to 75 percent over five years for refundable corporate tax credits that don’t currently have a sunset. This is an important step in the right direction for our state’s corporate tax code.

     And with those reforms to the corporate tax credits, we can begin to lower our corporate tax rate, which is currently one of the highest in the country. What I am very proud of with this corporate tax cut plan is that it has budget sustainability baked right into it. The corporate rate only lowers if we hit a corporate revenue trigger of $700 million.

     We said from the start of session that we were going to deliver tax relief for Iowans. We said the tax plan would cut taxes for ALL Iowans. We said that if we were to lower the corporate rate, we were also going to reform corporate tax credits. We said that we were going to eliminate taxes on retirement income so that more folks can continue to call Iowa home after they retire.

     Well, folks, promises made; promises kept.

Representative Lee Hein

Monticello, Iowa