This week, Senate Republicans rolled out a tax reform proposal following the initial plans released by Governor Kim Reynolds and the Iowa House.

State Senator Ken Rozenboom says the upper chamber’s version has a goal to end up with a flat 3.6 percent tax rate, and opens the door to potentially eliminating the tax altogether.

“If we get this done our state income tax rate will be the 4th lowest income tax rate in the country instead of the 8th highest as it is today,” he says. “Always keep in mind that several states have no income tax at all, and we have to compete with them.”

The Senate proposal, similar to the Governor’s plan, also eliminates all taxes on retirement income and provides farmers a first-time pension exemption by exempting income from either cash rent or farm crop shares.

Democrats have argued the measure could severely impact current revenue and funding levels and that the cuts favor the wealthy and higher tax brackets, and that they instead want to target tax relief for middle class Iowans.

Iowa also has a corporate tax rate of almost 10 percent, and Rozenboom says the Senate intends to eliminate some of the current exemptions and credits, and ultimately end up with a lower corporate tax.