Reynolds Delivers GOP Response To Biden’s State of the Union Address
HIAWATHA, Iowa – Governor Reynolds delivered the Republican response to President Biden’s State of the Union on Tuesday, March 1. In the message, Biden spoke on important issues facing Americans and offered his ideas on solving the nation’s problems, including suggestions for new laws and policies.
Prior to her State of the Union rebuttal, Reynolds signed into law a major tax cut package that impacts Iowan individuals and corporations. The compromise on tax reform legislation was reached this week between the House and Senate leadership and the governor’s office, which the Iowa Republican party says is the largest tax cut in state history.
“Today is a great day for the state of Iowa as we dramatically reform Iowa’s tax system for the better and make our state one of the most competitive in the nation,” Reynolds said.
The personal income tax phases in a flat tax rate of 3.9% by tax year 2026. This will reduce the number of brackets and rates over the same years. The corporate income flat tax reduces corporate income tax rates to a single rate of 5.5% from the current 9.8% if the state’s net receipts are more than $700 million in the previous fiscal year.
The removal of retirement income tax exempts all income defined as retirement income for taxpayers aged 55 years and older starting in tax year 2023. This legislation also eliminates capital gains tax on the sale of stocks from employee stock ownership plans (ESOPs).
The preservation of tax credit programs has lowered the refundability of several programs as well, including Research Activities Tax Credits and Redevelopment Tax Credits in order to increase state revenues and offset rate cuts.
The Economic Alliance has worked with legislators and partnering organizations to influence a tax structure that promotes economic development incentives that have been successfully leveraged to grow our region’s economy and remain competitive.