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Published on:

7th Feb 2022

Do states with low income tax see more growth than states with high taxes?

Iowa Sen. Mike Klimesh, R-Spillville, wrote in a Jan. 14 legislative newsletter about legislative proposals to ensure Iowans “keep more of their hard-earned money.” Democrats have criticized these plans as disproportionately benefiting higher wage earners.

Gov. Kim Reynolds has proposed a 4 percent flat tax rate, which would be less than half the current top Iowa income tax rate if approved. The House and Senate have both unveiled different packages that staff estimate would provide $1.7 billion and nearly $2 billion in tax relief, respectively. Those both carry higher price tags than Reynolds’ $1.6 billion proposal.

The governor’s proposal also calls for a gradual reduction in the corporate tax rate each year revenue surpasses $700 million, until the top rate is 5.5 percent. The Senate proposed a five-year gradual reduction of the top rate from 9.8 percent to 7.8 percent, while the House plan does not make any changes.

“Data has long shown the states with low or no income tax grow more quickly than states with high, punitive tax rates,” Klimesh wrote.

The Fact Checker team checks statements made by an Iowa political candidate/officeholder or a national candidate/officeholder about Iowa, or in ads that appear in our market.

Claims must be independently verifiable. We give statements grades from A to F based on accuracy and context.

If you spot a claim you think needs checking, email us at factchecker@thegazette.com.

This episode of the podcast is researched and hosted by Marissa Payne and features Elijah Decious, Erin Jordan, and Michaela Ramm. The Fact Checker Podcast is produced by Stephen M. Colbert and music is Lobby Time by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3986-lobby-time/

License: http://creativecommons.org/licenses/by/4.0/

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The Gazette Fact Checker
The Gazette's Fact Checker team in Cedar Rapids, Iowa, gives a peek behind the scenes as they discuss this week's fact check and establish a letter grade.
The Fact Checker team checks statements made by an Iowa political candidate or officeholder or a national candidate or officeholder about Iowa, or in ads that appear in our area.
Claims must be independently verifiable.
We give statements grades from A to F based on accuracy and context.
If you spot a claim you think needs checking, email us at factchecker@thegazette.com.

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The Gazette

The Gazette, located in Cedar Rapids, Iowa has been serving Eastern Iowa since 1883. The Gazette team produces podcasts covering news, sports, opinion, business and other topics. Listen and subscribe today.