Late Friday afternoon, Governor Kim Reynolds and Iowa House and Senate leadership released a summary of their tax reform agreement. From the details given, ITR is glad to say we support this plan because it is not just tax reform, it is tax relief!
In last week’s Watchdog, we shared the three principles we have been encouraging legislators to include in the final tax reform bill. These are:
- Reduce Rates
- Include both Individual and Corporate
- Couple and Conform to Federal Code
- Reduce the top individual rate from 8.98% to 6.5%.
- Reduce the number of individual income tax brackets from nine to four.
- Reduce the nation’s highest corporate income tax rate of 12% to 9.8%.
- Use revenue triggers to reduce rates and provide a budget safeguard.
- Increases Section 179 and Qualified Business Income (QBI) deductions for farmers and small businesses
- Modernizes Iowa’s sales tax code to provide a level playing field between online businesses and brick and mortar businesses.
- Gradually eliminate federal deductibility.
- Automatically couple with most federal tax laws.
- Providing a comprehensive review of tax credits.