Governor Kim Reynolds has approved a plan that’s designed to eventually cut Iowans’ income taxes by about 400-million dollars a year.
Reynolds held a bill-signing ceremony Wednesday afternoon at a business in Hiawatha.
The plan cuts individual income taxes by an average of 10 percent in 2019.
In 2020 and beyond, the tax reductions outlined in the law will only take effect if state tax collections grow by at least four percent each year.
OC……….taxes go up.” :16
Iowans have had the ability to take a state income tax deduction equal to the amount of federal income taxes they paid.
So when federal taxes are lowered, Iowans wind up paying more in state income taxes if lawmakers don’t make adjustments.
The plan Reynolds and her Republican colleagues in the legislature crafted would eventually get rid of that deduction, as it makes Iowa’s income tax rates appear higher than they are when compared to other states.
In the end, elements like cutting Iowa’s corporate income tax rate are included, but do not take effect for two years and ONLY if the state’s economy is growing.