One of the biggest topics at the Iowa Legislature is tax reform, and the State Senate recently passed a bill to drastically alter the Iowa tax code.

State Senator Jake Chapman (R-District 10) says he’s helped usher Senate File 2383 through to the House of Representatives. Chapman explains, the bill, commonly referred to as the Iowa Working Families Tax Relief Act, will involve an estimated billion-dollar tax cut. For a middle-income earner, that equates to $1,000 a year less taken out in taxes. He adds, simply cutting the taxes would put an even bigger strain on an already difficult budget, so there’s also a plan in the bill to remove tax credits.

“We have an uncompetitive tax code here in Iowa. And because we’ve had an uncompetitive tax code, we’ve been using a lot of tax credits to incentivize business to come here to Iowa. So this bill recognizes that as we make Iowa’s income tax competitive, it’s time for us to phase out these tax credits. And there’s been a lot of criticism over the tax credits over the last several years, and we think it’s appropriate to phase these tax credits out and make all Iowans winners.”

Chapman says individual tax rates will be reduced by about 30%, while corporate taxes will decrease from 12% to 7%. If passed through the House and signed by the governor, the tax reform bill will phase in over several years, while the tax credits phase out at the same pace. Chapman is optimistic the plan will pass this year. To hear more about the current legislative session, listen to today’s Perry Fareway Let’s Talk Dallas County program at RaccoonValleyRadio.com.