Reynolds is crowned queen of the ‘Tax Prom’

Two words that I never thought would go together are “tax” and “prom,” but when you combine Wall Street and Washington, D.C., you get the Tax Foundation’s annual Tax Prom.

This year the Distinguished Service Award was awarded to to Iowa Gov. Kim Reynolds. If signing tax legislation that mostly benefits huge corporations and the super-wealthy while leaving the rest of us behind is the eligibility requirement, she’s very deserving of her award.

Reynolds often touts her tax policies as a success, framing them as a pathway to prosperity for all Iowans. However, beneath the rhetoric lies a grim reality: her tax cuts overwhelmingly favor corporations and the super-wealthy, leaving working-class Iowans to shoulder the burden of an economy that increasingly works against them. As Iowa faces stagnating growth, struggling public services, and widening inequality, it is clear that Reynolds' tax agenda prioritizes the interests of the few over the well-being of the many.

In the same week that Gov. Reynolds is crowned queen at the Tax Prom in Washington, D.C., Jack Link’s announces layoffs at its warehouse in Laurens. This is a recent trend in Iowa. Winnebago Industries announced layoffs at its Forest City plant, Bridgestone laid off 118 workers in Des Moines, Tyson Foods announced it would close its pork processing plant in Perry, John Deere laid off workers at multiple plants, Wilson Trailer Company laid off workers in Sioux City, and more, and that’s in this year alone.

One of the most glaring issues with Reynolds’ tax policies is their regressive nature. Her 2022 tax reform package slashed the state’s top income tax rate, creating a flat tax that disproportionately benefits high earners. According to analysis by the nonpartisan Common Good Iowa, the wealthiest 5% of Iowans will receive 50% of the benefits from these changes, while low income Iowans — those who truly need relief — will see little to no meaningful benefit. This approach not only fails to address income inequality but exacerbates it, ensuring that wealth continues to concentrate at the top while many working families struggle.

In 2024, legislation was passed to accelerate the flat tax rate of 3.8% for all individual income taxpayers in Iowa starting in Tax Year 2025. Under this tax plan, over 500,000 tax filers will get no tax cut while the average tax change for Iowa taxpayers making over $1,000,000 is over $23,000 and the average annual tax break for the lowest income Iowans in the state is $5.

Additionally, Reynolds has championed corporate tax cuts that further erode Iowa’s revenue base. Her administration is reducing the corporate tax rate from 9.8% to 5.5% over several years, a move celebrated by huge corporations but disastrous for the state’s finances. These cuts were made with the promise of job creation and economic growth. We will see how that goes, but currently Iowa’s economic growth rate lags behind the national average, and many rural communities are still grappling with declining populations, job losses, and a lack of investment in critical infrastructure. It is foreseeable these tax breaks will primarily enrich large corporations and out-of-state shareholders, leaving working Iowans behind.

The consequences of Reynolds’ tax policies are painfully evident in Iowa’s public services. With a reduced tax base, the state is struggling to adequately fund essential services like education, health care, and public safety. Iowa’s public schools, once a point of pride, are facing severe budget constraints, leading to larger class sizes, and teacher shortages. Health care access has also deteriorated, particularly in rural areas where hospitals are closing and residents are forced to travel long distances for care. Instead of addressing these pressing issues, Reynolds has doubled down on her tax-cutting agenda, perpetuating a cycle of disinvestment that harms the most vulnerable Iowans.

Trickle-down economics has had years to prove that it can deliver results for the average Iowan, but the evidence tells a different story. Iowa deserves better than policies that leave its economy sputtering and its people struggling. Tax reform should be about fairness and shared prosperity, not giveaways to the rich and powerful. Until things change, working-class Iowans will continue to bear the brunt of Gov. Reynolds misguided priorities, while corporations and the super-wealthy reap the rewards.

Democratic Rep. J.D. Scholten is a member of the Iowa House of Representatives for District 1.