Tax reform will be front and center for the 2022 Legislative Session, as Iowa Republicans push to further cut income and corporate tax rates after passing additional relief in 2021.

District 79 State Representative Dustin Hite says a proposal made by Governor Kim Reynolds during the annual Condition of the State has been further explained with additional details found in House Study Bill 551. Overall, it proposes a four-year phased cut into a flat income tax rate of four percent for all levels, a corporate tax reduction based on revenue triggers that would eventually drop it to 5.5%, and income tax exclusion from all retirement income, as opposed to the current $6,000 break.

“I think the Governor has laid out a bold and ambitious plan that puts Iowans first and makes us competitive on the national scene,” Hite wrote in his weekly newsletter.

Hite believes this is a starting point, and understands the challenge will be ensuring state revenue remains sustainable while improving the overall tax situation to make Iowa more competitive. While Hite was hopeful a large excess in the state’s Taxpayer Relief Fund would go back to taxpayers — he believes the Governor intends to use it as a buffer to ensure tax cuts are enabled and as a barrier if state revenue should drop significantly during that process.