Reynolds backs $2B tax cut with changes to income tax rates

By DAVID PITT
Associated Press

DES MOINES, Iowa (AP) — Iowa Gov. Kim Reynolds is proposing that Iowa cut taxes by nearly $2 billion by moving to a 4% flat income tax phased in over four years and repealing all state taxes on retirement income beginning next year. Reynolds made the proposals Tuesday in her annual Condition of the State message delivered to lawmakers. The flat tax proposal is expected to reduce state revenue by $1.58 billion in tax year 2026 when it is fully implemented. The retirement tax relief is estimated to cost the state $400 million in revenue in 2023, the first year she proposes it to be effective.