Common Good Iowa

Huge Iowa tax cuts nothing to celebrate

Posted on March 1, 2022 at 10:19 PM by Anne Discher

Governor Kim Reynolds might have started with a ‘thank you’ to Americans tonight in her response to President Biden's. Federal pandemic funds carried Iowa through a deep, sharp recession, and set our state leaders up to meet real needs in our state. They could have acted on our state’s neighbors-helping-neighbors values that have made Iowans proud for generations.

Instead she touted a nearly $2 billion tax cut that undermines Iowa’s values by tilting the system even more in favor of the top 1 percent and wealthy corporations, at great cost to ordinary Iowans. If the governor thinks this policy choice is a national model, she is right. But it is a cautionary one.

This law will make it harder for future lawmakers to deliver for ordinary Iowans, especially kids and those struggling to make ends meet, so that the wealthy can get another tax break.

Even as they rushed through a tax cut that primarily benefits the wealthy, Iowa’s Legislature and governor set school funding so low for the next school year that 81 school districts — a quarter of all districts in Iowa — will be close to flat-funded or get even less from the state than they got this year. Our schools shouldn’t have to foot the bill for this misguided tax cut.

Child care, clean water, mental health services — are all threatened by a tax cut that will skew our tax system further in favor of the wealthy. Our tax code was already upside-down, with the poorest Iowans paying more of their income in taxes than the top 1 percent. This tax cut will make inequality — including racial inequality — worse.  Almost half of the tax cut will go to the richest 5 percent of taxpayers, who will see an average cut of over $8,000. The richest 1 percent get over $23,000.

This shortsighted policy is nothing to celebrate.


This post is from a statement by Common Good Iowa Executive Director Anne Discher following Governor Reynolds' nationally televised response to President Biden's State of the Union address.

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