Gov. Reynolds proposes reduction in income tax to 2% while “trying to get to 0%”
CEDAR RAPIDS, Iowa (KCRG) - Iowa Gov. Kim Reynolds (R) said she intends to lower the state’s income tax rate to 2% while “trying to get to 0%” in an interview with a conservative podcast published last Thursday.
“The Republican Governors, that I’ve served with and work with, we are so damn competitive,” she said. “You know, like, I went to 3.9%. Tate [Reeves] said 3.8%. Now I’m going to have to go to 2% on my individual income tax, trying to get to 0%. So, I can compete with Kristi [Noem]. It is all good. You all win.”
Gov. Reynolds signed a bill lowering the income tax rate to 3.9% for all Iowans by 2026 and eliminated state taxes on retirement income like 401K’s in 2022. Republicans, who control both branches of the state legislature and the Governor’s Mansion, passed tax-cut legislation in 2021 and 2018. The newest round of cuts helped Iowa see a drop in revenue by $575 Million, but Iowa still has a state budget surplus after receiving federal funds.
Gov. Reynolds, like other Republicans, have indicated they plan to further lower taxes like during the Gubernatorial Debate on PBS in 2022. Then, the Governor didn’t give any details on a plan or commit to trying to eliminate state income tax completely like Florida, Tennessee, Texas, South Dakota, Wyoming and others.
“I’ve indicated that we’re not done,” Gov. Reynolds said in October 2022. We’ll continue to look at it but we’re going to continue to do it in a responsible manner so that we can sustain the tax cuts. But if we’re over-collecting we’re going to get that money back to hardworking Iowans.”
She also said the goal was to create a competitive tax environment for people and businesses to stay in Iowa.
TV9 reached out to a spokesperson for the Governor’s Office this morning about the statement, but hasn’t heard back from her office by publication.
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