• About Us
  • Advertise
  • Contact Us
  • Privacy Policy
Saturday, March 25, 2023
The Iowa Torch
  • Home
  • State Government
  • Federal Government
  • Local Government
  • Politics
  • Education
  • Opinion
No Result
View All Result
  • Home
  • State Government
  • Federal Government
  • Local Government
  • Politics
  • Education
  • Opinion
The Iowa Torch
The Iowa Torch
No Result
View All Result
Home Opinion

Hendrickson: Once again Reynolds proves that conservative budgeting pays off

John Hendrickson: Fiscal conservatism is working in Iowa, and we can now join with North Carolina as a gold standard example for other states to follow.

John HendricksonbyJohn Hendrickson
September 28, 2022
in Opinion
Reading Time: 4 mins read
Hendrickson & Williams: Governor Reynolds’ Tax Reform Ideas are Pro-Growth

Governor Kim Reynolds gives the condition of the state address to members of the Iowa Legislature on Jan. 11, 2022, at the State Capitol.
Photo Credit: The Des Moines Register/Pool

Governor Kim Reynolds announced that Iowa’s budget will end Fiscal Year 2022 with a $1.91 billion surplus. The follows Fiscal Year 2021 $1.24 billion surplus. Iowa’s budget is in healthy condition because of prudent budgeting and fiscal conservative policies. Governor Reynolds and the legislature are demonstrating that conservative fiscal policies work to create a strong economy and a healthy financial foundation. 

RELATED POSTS

Sherman: Iowa can fight back against the Biden Administration’s attack on retirees and families

Hendrickson: Iowa’s fiscal foundation is solid

Feenstra: Delivering a strong Farm Bill for Iowa

Kraig Paulsen, who serves as the Director of both the Departments of Management and Revenue, stated that “Iowa’s strong financial status again proves that we continue to over collect from Iowa taxpayers.” As a result, Governor Reynolds and the legislature has made it a priority to return the money back to taxpayers. 

Since 2018, Governor Reynolds and the legislature have made tax reform a priority. This spring Governor Reynolds signed into law the largest tax relief measure in state history. Under the new tax reform law, the current nine bracket progressive income tax rate system will be gradually reduced until it reaches a flat 3.9 percent by 2026. The corporate tax, which currently stands at a top rate of 9.8 percent, will be phased down until it reaches a flat 5.5 percent. 

Critics of the tax reform measure used the tired class warfare arguments of “tax cuts for the rich” and that the budget would be in disaster and vital services would suffer. Those critics are wrong. Governor Reynolds and the legislature have not only funded the priorities of government, but they have also balanced prudent spending with pro-growth tax reform. 

“Time and again over the last five years, we’ve ignored the self-appointed experts who insisted that tax cuts and economic prosperity wouldn’t be worth the cost,” said Gov. Reynolds. Further, Governor Reynolds noted that the “budget numbers show, they were worth every penny. It turns out that growth-oriented policies and fiscal restraint are a powerful combination.”

In addition to having close to a $2 billion surplus, Iowa’s reserve funds will be at their statutory full levels of $830 million and the Taxpayer Relief Fund will have a balance of $1.06 billion. As a result of strong revenue growth, the corporate tax rate is scheduled to be reduced. 

Corporate tax receipts will exceed $850 million, which will translate in a 14.2 percent reduction in the top rate. The 9.8 percent rate will be lowered to 8.4 percent, which was not anticipated to occur until 2027.

As a result of prudent budgeting and pro-growth tax reforms Iowa’s economy is becoming more competitive. Iowa joins several other states that have enacted significant tax reforms. “When looking for the state that made the most significant changes to its tax code this year, that award probably goes to Iowa, the other state where lawmakers enacted tax reform in 2022 that moves in the same direction as North Carolina’s reforms,” argues Patrick Gleason, who serves as Vice President for State Affairs at Americans for Tax Reform. 

North Carolina has served as the gold standard for state tax reform. North Carolina has lowered the individual income tax rate and the corporate tax rate is scheduled to be eliminated. The reason for the success of North Carolina is they have balanced limiting spending with prudent tax reform. This is exactly the policy blueprint that Governor Reynolds and the legislature are following. Iowa is now a gold standard example for other states to follow. 

This year is being hailed as a “flat tax revolution” because of the number of states that have enacted legislation to transition from a progressive income tax rate structure to a low flat rate. Iowa joins Georgia, Arizona, Mississippi, Idaho, and other states are considering moving to a flat tax. 

ADVERTISEMENT

“Iowans want common-sense responsible policies even when it requires going against the grain. We cut taxes when many said our budget couldn’t handle it; we kept our economy open when few others were; we chose growth over government even when it was hard. As a result, our fiscal health is strong, and our tax code is more competitive than ever,” stated Gov. Reynolds.

Tax reform is far from finished in Iowa. By continuing to follow fiscal conservatism and prudent budgeting rates can be lowered even more until the goal of eliminating the income tax is achieved. 

The cornerstone of a any sound tax policy is to keep spending limited. “This generational tax cut will be implemented over the next several years, and a conservative, sustainable budget must accompany that tax relief,” argues Iowa’s Senate Majority Leader Jack Whitver. 

Once again Governor Reynolds proves that conservative budgeting pays off. She is a champion for Iowa taxpayers and a defender of traditional values. Fiscal conservatism is working in Iowa, and we can now join with North Carolina as a gold standard example for other states to follow. 

Tags: Iowa state budgetJack WhitverKim ReynoldsKraig PaulsenPatrick Gleasontax reform
ShareTweetShare
ADVERTISEMENT
Previous Post

Reynolds announces $1.91B budget surplus, significant drop in corporate tax rate

Next Post

Pate launches updated ‘Voter Ready’ website ahead of general election

John Hendrickson

John Hendrickson

John Hendrickson is the Policy Director for TEF Iowa.

Related Posts

State Government

Reynolds signs two bills addressing transgender children

March 23, 2023
Opinion

Hendrickson: Iowa’s fiscal foundation is solid

March 22, 2023
white tiled wall with men s restroom sign
State Government

School restroom bill heads to Reynolds’ desk

March 20, 2023
State Government

Iowa House sends government reorganization bill to Reynolds’ desk

March 16, 2023
people running during daytime
Opinion

Ernst: For our daughters.

March 13, 2023
Reynolds appoints Chad Aldis to head Iowa Dept. of Education
Education

Reynolds appoints Chad Aldis to head Iowa Dept. of Education

March 9, 2023
Next Post
Pate launches updated ‘Voter Ready’ website ahead of general election

Pate launches updated 'Voter Ready' website ahead of general election

brown and beige wooden house under blue sky

Polk County may increase housing assessments by 22 percent

Sign-Up For Our Daily Updates

Get The Iowa Torch right in your inbox!

Please wait...

Thank you for signing up!

Recommended Articles

Chapman, County Sheriffs Back Reynolds’ Decision to Not House Migrant Children

Chapman, County Sheriffs Back Reynolds’ Decision to Not House Migrant Children

April 13, 2021
Ernst Introduces Bill to Prevent Sex Offenders Entry Into U.S.

Ernst Introduces Bill to Prevent Sex Offenders Entry Into U.S.

October 7, 2021
Axne, Hinson Vote for Legislation to Protect Older Workers Against Discrimination

Axne, Hinson Vote for Legislation to Protect Older Workers Against Discrimination

June 24, 2021

Popular Stories

  • elderly couple walking on a flower field

    Sherman: Iowa can fight back against the Biden Administration’s attack on retirees and families

    0 shares
    Share 0 Tweet 0
  • School restroom bill heads to Reynolds’ desk

    0 shares
    Share 0 Tweet 0
  • Ernst: Biden’s WOTUS whiplash.

    0 shares
    Share 0 Tweet 0
  • Horn: It’s time for employers get serious about Iowa’s untapped workforce

    0 shares
    Share 0 Tweet 0
  • Reynolds signs two bills addressing transgender children

    0 shares
    Share 0 Tweet 0

The Iowa Torch

The Iowa Torch​ is a for-profit, news organization that focuses on political news as it relates to Iowans

Categories

  • Education
  • Federal Government
  • Iowa History
  • Local Government
  • News
  • Opinion
  • Politics
  • State Government
  • Uncategorized
  • Uncategorized

Newsletter

Please wait...

Thank you for signing up!

© 2022 The Iowa Torch, a publication of 4:15 Communications, LLC.

No Result
View All Result
  • Home
  • About Us
  • Advertise
  • Contact Us
  • State Government
  • Federal Government
  • Local Government
  • Politics
  • Education
  • Opinion

© 2022 The Iowa Torch, a publication of 4:15 Communications, LLC.