Iowa Senate leader wants tax cuts for all

JOHNSTON — If Republican state lawmakers explore ways to reduce Iowans’ state income taxes during next year’s legislative session, Senate Republicans will seek to create tax cuts for all Iowans, regardless of income, the party’s Senate leader said Friday.

“Wealthy Iowans work, too,” Senate Majority Leader Jack Whitver said during taping of this weekend’s “Iowa Press.”

“We want it to apply to every Iowan, and that is what we have done over the last five years is cut taxes for everybody,” the Ankeny Republican said.

Statehouse Republicans — who control the Iowa House and Senate — have been making plans to enact tax cuts ever since Gov. Kim Reynolds announced the state has a $1.24 billion budget surplus; another $1 billion in the state’s taxpayer trust fund; and $800 million in the state’s reserve and emergency accounts.

Reynolds, also a Republican, and Iowa House Speaker Pat Grassley of New Hartford also have said Republicans intend to propose more state tax cuts when legislators return for the 2022 session in January.

Jennifer Konfrst, the Democratic Iowa House Minority Leader from Windsor Heights, said recently that any tax cuts should be targeted to “working families.”

“We need to make sure that tax cuts aren’t again going to wealthy families or to corporations or special interests,” Konfrst said on a previous episode of “Iowa Press.”

Whitver was less interested in such a tax break.

“We want broad-based tax reform,” he said.

No income tax?

Whitver acknowledged Iowa Republicans are discussing phasing out Iowa’s income tax.

“Right now, there’s about eight states in the country that do not have an income tax,” he said. “There’s another eight states that have said, ‘We want to get on the path to no income tax.’

“And I would like Iowa to be included in one of those states that say ultimately the goal is to get to nothing,” Whitver said.

“How you do that is difficult. It takes time. But that should be the goal, to get rid of our income tax. And so that means we’re reducing taxes on everybody.”

Iowa’s state income tax collections produced nearly $4 billion — almost half of all state revenue — in the state budget year that ended in June 2020, according to the state’s nonpartisan fiscal analysis agency.

Eliminating such a significant portion of state revenue would almost certainly require some countermeasure, such as an increase in the state sales tax.

“It’s very difficult. I think only one state has ever had an income tax and then got rid of it. The rest of them just never had it,” Whitver said. “And so it takes time. Usually you can’t do this in one or two years.”

The state’s Revenue Estimating Committee, which makes state revenue projections to guide state budget decisions, is scheduled to meet next week and publish its October projections.