By John Hendrickson for RealClear Politics
President Joe Biden and tax and spending Democrats can learn a lesson from Governor Kim Reynolds. Iowa will end fiscal year 2021 with a 1.24 billion surplus. Last year, Iowa had a surplus of $ 305 million.
Since taking office, Governor Reynolds has pursued prudent budgeting and growth-tax reform policies that have kept Iowa’s financial house strong and stable while prioritizing government.
The same is true of accounting, which has recently revealed them The financial condition of the state is 2021 The report ranks Iowa in the top 10 (9 out of 50) of the financially stable states. Following the policy of royal conservatism, Governor Reynolds and the Republican legislature caused the Iowa economy to slow down from the epidemic.
Even as the epidemic progresses, Iowa’s financial situation is orderly thanks to the budget. Iowa had a budget surplus as the 2021 legislature began.
Related: Iowa governor ready to ban vaccine passports
In addition to the $ 1.24 billion surplus, there is a lot of money in reserves, including $ 817.9 million in the Cash Reserve Fund and the Economic Emergency Fund, and 0 1.054 billion in the Taxpayer Relief Fund. Following fiscal conservatism, the Iowa economy was not only prepared for an economic emergency, but it allowed the state to recover quickly.
Governor Reynolds and the Republican legislature have not only controlled spending, but they have also introduced growth tax reforms.
In 2018, the legislature passed a comprehensive tax reform system that began lowering both personal and corporate income tax rates. The law also broadened the sales tax base, which helped improve the expected sales tax revenue during the epidemic.
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Iowa is one of 11 states that have introduced tax reform this year. An important component of the 2021 Tax Reform Act, in addition to phasing out inheritance taxes, is to eliminate the income tax triggers that were introduced in 2018 to reduce income tax.
Now that the triggers will be eliminated in 2023, the top rate will drop to 6.5 percent and personal income tax brackets will condense from 9 to 4 brackets with a lower rate of 4.4 percent.
In 2022, the Iowa Legislature will create opportunities on previous tax reforms. Reducing personal and corporate income taxes and resolving higher property taxes should be a priority.
When signing the 2021 Tax Reform Bill, Governor Reynolds said, “We’re not done yet. Next year, I’ll propose additional income tax cuts as we continue to make Iowa the most attractive place in America to open a business, build a family and start a career.”
Governor Reynolds even said that the ultimate goal is to eliminate Iowa income tax. The governor understands that Iowa is in competition with other states for both jobs and people. Iowa may not be complacent because other states have lower tax rates. The 2022 legislative session will be an opportunity for Governor Reynolds and the Republican legislature to push for growth-related tax reforms that reduce income tax rates.
Related: New Iowa poll shows majority disagree with what Joe Biden is doing – Orange Harris, too
Fiscal conservatism is working in Iowa and the 1. 1.24 billion surplus is proof that keeping costs low and lowering tax rates leads to economic prosperity. Policymakers in Iowa should work to ensure additional tax breaks for Iowa taxpayers by 2022.
Iowa could look at states like North Carolina, Indiana, etc., which have successfully reduced tax rates. Expenditure is the focus of tax policy and if policymakers continue to spend less, Iowa taxpayers will need to see more tax relief.
The Des Moines registration Has released a new survey that shows a 53 percent job approval rating for Governor Reynolds. The governor’s approval rating was even higher – 57 percent – when respondents were asked how he managed the Iowa economy.
The survey confirms that Governor Reynolds in Iowa supports the progressive conservative growth policy agenda. Iowa proves you can’t pay taxes and spend on prosperity.
Syndicated with permission from RealClearWire.
John Hendrickson is policy director at the Tax Education Foundation in Iowa, a public policy think tank.
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