Reynolds and legislative leaders look to tax cuts in 2022

Gov. Kim Reynolds said a major point of her agenda will be to cut taxes in the upcoming legislative session.


Gabby Drees

Lt. Gov. Adam Gregg and Iowa Gov. Kim Reynolds smile after Reynolds made a joke at a press conference at the Iowa State Capitol in Des Moines, Iowa on Tuesday, January 4, 2022.. (Gabby Drees/The Daily Iowan)

Caleb McCullough, Executive Editor

DES MOINES — Iowa Gov. Kim Reynolds is hoping to see more tax cuts for Iowans in 2022, she said in a press conference hosted by the Iowa Capitol Press Association on Tuesday. 

Reynolds, a Republican, didn’t offer specific details of which taxes she’s looking to reduce and by how much, but she said she would have more information in her Condition of the State Address on Jan. 11, along with plans for improving Iowa’s workforce and education reform. 

“We’re overcollecting, and we’re not competitive at all,” Reynolds said of Iowa’s tax policy. 

Reynolds said the $1.2 billion surplus in the state’s budget and an estimated $1 billion in the taxpayer relief fund in 2022 show the state is charging too much in taxes. 

While she pushes to further reduce taxes after passing a wide-ranging tax cut package in 2021, Reynolds said she wants to lower taxes in a fiscally responsible way without cutting important state services. 

“We have to make sure that we can still fund priorities that are important to Iowans — public safety, education, and I think we’ve demonstrated that we can do that,” she said.

Republican legislative leaders, who control both chambers of the Statehouse, are also looking to cash in on last year’s budget surplus by cutting income taxes. 

At the press conference, House Speaker Pat Grassley, R-New Hartford, said a major goal of the session will be to cut individual income taxes while keeping the state’s revenue sustainable.

“With a billion dollars of overpayment from Iowa’s taxpayers, I think it’s imperative on the Legislature to make sure we’re getting that back in the hands of Iowans, with all the pressures they’re facing,” Grassley said.

Democrats said they wanted to keep tax cuts focused on the middle class, while Republicans said they would lower rates across all the state’s tax brackets. Neither party has released a detailed tax plan or proposal. 

Senate Minority Leader Zach Wahls, D-Coralville, said he is hopeful for bipartisan consensus on tax cuts, but he said Democrats want to ensure that tax cuts go to middle class Iowans.

“Generally speaking, I don’t think you’re going to see Democrats vote for a tax bill that’s going to lower taxes for millionaires, period,” he said.

Republican Sen. Amy Sinclair, of Allerton, also did not rule out eliminating the state income tax, as some senators have suggested, but she stressed that it’s unlikely to happen this year.

“Of course, the goal of Senate Republicans is to have income tax rates that are as low as possible,” she said. “We are not doing that willy nilly and we are not doing that without an eye to sustainability.”

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