Wednesday the Iowa House approved House File 194, a 20 percent income tax cut for all Iowans. It is the first reduction in income taxes since 1997. The bill, which passed with bipartisan support, will provide a much needed boost to the Iowa economy, including Iowa’s small business owners.
“Small businesses are the backbone of Iowa’s economy,” said Majority Leader Linda Upmeyer. “This bill will allow employers to put Iowans back to work, inject millions of dollars into Iowa’s economy and get our state moving forward again.”
According to the Iowa Association of Business and Industry, it’s estimated that more than 60 to 80 percent of Iowa businesses pay income taxes at the individual level. At the same time, the Tax Foundation has rated Iowa the 45th worst business tax climate in the country.
“Iowans know best how to spend their money and the government has too much of it,” said House Ways and Means Chair Rep. Tom Sands (R-Wapello). “This legislation is long overdue and is one of the best things we can do to put Iowans back to work.”
In addition to the income tax cut, the House previously passed $47 million in property tax relief. A larger, more comprehensive property tax reform bill is moving through the House Ways and Means committee.
“Iowans sent us here to cut taxes, shrink government and reduce spending,” said House Speaker Kraig Paulsen (R-Hiawatha). “The House Republican agenda reflects these priorities.”
The bill will now be sent to the Senate for their consideration.