Income tax

Gov. Reynolds Defends Proposed 4% Flat Income Tax: ‘It Makes Us Very Competitive’

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Iowa Governor Kim Reynolds salutes after delivering his statehood address before a joint session of the Iowa Legislature, Tuesday, Jan. 11, 2022, at the Statehouse in Des Moines, Iowa. (AP Photo/Charlie Neibergall)

Part 1: Governor Reynolds Defends Proposed 4% Fixed Income Tax

Tax cuts are a top priority for Republican lawmakers in Iowa this legislative session.

During Iowa Gov. Kim Reynolds’ statehood address last Tuesday, she offered a plan to move to a four-year fixed income tax of 4 percent. At 4%, Iowa would have the fifth-lowest income tax rate in the nation. It is expected to save Iowa taxpayers more than $1.58 billion by the 2026 tax year, according to the governor’s office.

Currently, there are four tax brackets for personal income tax. By 2026, Reynolds only wants one with a 4% tax rate. Iowans earning $75,000 or more a year would see their taxes drop the most, from 6.5% to the flat rate of 4%. Iowans earning $30,000 or less would see the smallest drop. For this reason, an Iowa State University economist said the flat tax rate would favor Iowa’s wealthy the most.

“[Reynolds] says that [her proposal] is “flat and fair”. No, a flat tax is not considered fair if we think in terms of tax fairness. A flat tax is simply flat. It says the poorest among us should pay the same tax rate as a burden on our income as the richest among us,” said David Swenson, an economist at Iowa State University.

Reynolds sat down one-on-one with WHO 13’s Dave Price. Here’s how she defended the flat tax proposal.

Part 2: Governor Reynolds tackles the growing number of Iowans hospitalized with COVID-19

The number of Iowans hospitalized with the coronavirus is the highest since December 2020. As of Friday, 998 people were in Iowa hospitals with COVID-19, according to the US Department of Public Health. Iowa. Those who are not fully vaccinated represent 77% of COVID-19 patients treated in intensive care units, according to state data.

Governor Reynolds addressed the increase.

Part 3: Should tax cuts be a top priority?

Two Iowa lawmakers are serving their final year in the Iowa Legislature as they focus on running for Congress. Republican Zach Nunn is running in the Republican primary for the 3rd congressional district and Democrat Liz Mathis is running in the 2nd congressional district.

Nunn and Mathis disagree on whether tax cuts should be a priority right now.

Insiders Quick 6: Governor Kim Reynolds

Governor Reynolds returns for the Insiders Quick 6.

Watch previous episodes of The Insiders here.