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Another proposed constitutional amendment for a flat rate income tax

News

April 3rd, 2024 by Ric Hanson

(Radio Iowa) – Another proposed amendment to Iowa’s Constitution has emerged at the statehouse. Republicans in the Senate are proposing a constitutional amendment that would require a flat rate for personal income taxes in Iowa. Under current law, Iowa’s multi-rate system is being phased out, to reach a single rate of three-point-nine percent by 2026. Republican Senator Jason Schultz of Schleswig says multiple rates that impose a higher tax the more income a person earns penalizes success.

“Every time you feel like you’re moving ahead, you’re rewarded by a salary, there’s another hurdle,” Schultz says. “We’re just going to take another chunk of that money.” Eleven states have a flat tax and four of those states have constitutions requiring a flat income tax. Democrats oppose the concept. Senator Cindy Winckler, a Democrat from Davenport, says the amendment would limit the legislature’s authority to make decisions about taxing and spending. “Taxes are not necessarily things that people want to pay, but services are what they expect to receive,” Winckler said, “and that balance is important.”

Last week, House Republicans proposed a constitutional amendment that would require a two-thirds vote by lawmakers to raise income taxes. Proposed constitutional amendment have to clear the House AND the Senate twice — in years that are separated by a statewide election — before Iowans see the proposed amendment on a ballot for yes or no vote.