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Reynolds Pushes 4% Flat Tax

Governor Kim Reynolds is proposing an end to state income taxes on pensions and retirement accounts and lowering the state income tax to a single rate of just 4% within four years.

The governor unveiled her plan last Tuesday night during the annual “Condition of the State” address to legislators. When fully implemented in 2026, Reynolds says a 4% flat tax would save an average Iowa family about $1,300 a year.

Reynolds proposes that retired farmers no longer be taxed on cash rent for their farmland, and she says Iowans who’ve earned stock in the company where they work should no longer be taxed when they sell shares.

Democrats like House Minority Leader Jennifer Konfrst say tax cuts should be targeted to the middle class.

Senate Democratic Leader Zach Wahls says some Iowans, like part-time workers, will wind up paying more in taxes under a 4% flat tax.

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