State Legislature Passes Tax Reform Bill on Final Day of Session

May 11, 2018 5:35 am

Iowa state legislature

Last Saturday, the Iowa Legislature finished up the 2018 session by passing one final bill: Senate File 2417, which deals with Iowa’s tax laws.

The bill passed out of the Senate 28-20, and later in the day it passed through the House as well, 54-32. It is now headed to Governor Kim Reynolds’ desk to be signed into law. State Representative Ralph Watts says while the bill provides sweeping changes to the state’s tax laws, many of them won’t take effect for quite some time, if ever. “The bill actually has some triggers in it, so a lot of the tax cuts, a lot of the tax changes won’t take place unless we have about a 4.9% growth trigger. Now, 4.9% is a pretty good hurdle to get to, because we haven’t had 4.9% in the last several years. So I think some of the excitement and concern about the tax cuts won’t happen unless we have that growth.”

Republican lawmakers who have supported the bill point out it’s estimated to save taxpayers more than $2 billion over the next six years. According to an analysis by the United States Department of Revenue, that’s an average savings of $300 per year per taxpayer. However, opponents have pointed out that according to the same analysis, the vast majority of the tax savings will be felt by the wealthiest individuals and corporations. The Department of Revenue estimates that in the tax year 2021, Iowans earning $60,000 or less per year, which makes up 66% of taxpayers, will receive just 13% of the total tax savings. Meanwhile earners of over $250,000 per year, which represents just 2.5% of Iowans, will reap 46% of the overall savings.

In spite of the opposition, the governor is expected to sign the tax reform bill into law soon. To learn more about the legislative session, listen to yesterday’s Perry Fareway Let’s Talk Dallas County program at RaccoonValleyRadio.com.

Comments are closed