Add your contacts.Īs a result of tax reform passed by the Iowa Legislature and signed into law by Reynolds in 2018, the number of tax brackets will be reduced to four, ranging between 4.4 and 6.5 percent. You will begin to receive our Daily On Iowa Politics updates. Most Iowa workers’ income was taxed at between 4.14 percent, with rates increasing as income increased, up to a top rate of 8.53 percent for those earning over $78,435 of taxable income. In 2021, Iowa had nine state income tax rates, tied for the second-most in the country. ![]() The remaining states, including Iowa, have varying forms of progressive, or graduated, income tax structure. The list includes more blue states like Michigan and Massachusetts, but also red states like Kentucky and Utah.Įight states have no state income tax. Ten states currently have a flat state income tax, including Iowa’s eastern neighbor, Illinois. They prefer a more progressive tax structure that taxes higher wager-earners at higher rates than low-income workers. A common pitch has been that a flat tax would make filing taxes simple enough to fit on a postcard.Ĭritics say a flat tax is unfair because it asks the lowest wage-earners to pay the same rate on their taxes as high wage-earners. Supporters say a flat tax is fair and simple. ![]() Steve Forbes ran on a national flat tax platform as part of his 2000 presidential campaign. Flat taxes have been an idea for years, and have their fair share of both supporters and critics.
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