Could Iowa Be The Next State With NO State Income Tax?
If Iowa Governor Kim Reynolds has her way, Iowa could soon be the next state in which its residents no longer are required to pay state income tax.
The Cedar Rapids Gazette reports that Governor Reynolds stated last week that it is her goal to abolish the state income tax by the end of her four-year term. State lawmakers have already passed numerous tax reform measures over the past several years, including the new 'flat tax' rate for personal income tax. Income taxes in Iowa will be phased down to a flat rate of 3.9% by 2026. That means every resident in Iowa will be in the one remaining tax bracket no matter what they earn, according to the Gazette.
Critics of the plan argue that it will benefit wealthy Iowans the most. Governor Reynolds and other supporters say that it will attract more people to the state of Iowa and make the state more competitive. The Gazette reports that as of right now, seven states have no state income tax. They include Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. Officials say that of the states that have no state income tax, all are surviving financially, and have high economic growth rates.
Reynolds stated that the tax cuts in Iowa have helped the state meet national economic challenges, while still funding state programs and making large investments in education, broadband, and public safety. What do you think? Not paying any state income tax doesn't sound bad on the surface, but what will the state do long-term without the tax revenue?