Iowa Governor Kim Reynolds’ campaign released a new TV ad on Monday entitled “Paycheck” that highlights her support for lower taxes, her understanding for Iowans working to make ends meet, and how her Democratic opponent, Fred Hubbell, wants to raise taxes if elected.
“Governor Kim Reynolds is fighting to lower taxes for hardworking families all across Iowa,” Hooff Cooksey, campaign manager for the Reynolds campaign, said. “Unlike her opponent, she understands that every dollar counts, and Iowans working to make ends meet deserve to keep more of their hard-earned money. Fred Hubbell has admitted that he wants to raise taxes, eliminate ‘all of the tax cuts’ if elected, and we can’t afford to go back to that style of leadership.”
In May, Reynolds signed into law the largest tax cut in Iowa history. When fully implemented, her tax reform package will save Iowa families earning $50,000 per year roughly $1000 every year.
Iowa’s corporate tax rate of 12 percent, which is the highest in the nation, was lowered to 9.8 percent (which is still high). The law provides additional tax relief for Iowa businesses and farmers that is phased-in over time by increasing Section 179 expensing and the Qualified Business Income (QBI) deductions. Iowa’s sales and use tax s modernized by taxing many digital sales
Individual rates will be reduced in 2019, including a cut of the highest rate from 8.98 percent to 8.53 percent. If enough revenue growth is realized by the state in future years ($8.3 billion by FY 2022 amounting to 4 percent growth each fiscal year), tax rates will be reduced further, with the top individual rate reduced again to 6.5 percent and reduce the number of tax brackets from nine to four. Federal income tax deductability will also be eliminated if Iowa reaches that revenue trigger.
On June 8th, Hubbell criticized the tax cuts saying he would “peel back” if he is unable to maintain funding for state priorities the Cedar Rapids Gazette reported:
“If we have a billion dollars of hits to our farm economy, that’s going to be hundreds of millions of dollars of hits to our state revenue, and our state isn’t going to be able to afford that,” Hubbell said.
In that case, the state will be hard-pressed to repay money borrowed from the rainy day fund and maintain adequate funding for state priorities like health, education infrastructure.
“If today’s world is what you’re going to have in January, we’re going to have to peel back all those tax cuts because our state is not going to be able to afford that,” Hubbell predicted.
However, he continued, “there are some things in that tax law, like getting rid of federal deductibility and leveling the playing field for Main Street businesses with , which I think are good, we’d like to try to keep those.”
Read the transcript of the ad below:
Gov. Reynolds: I know every way to stretch a paycheck, from cutting coupons to hand-me-downs.
Gov. Reynolds: I’m Kim Reynolds and that’s why as governor I signed the largest middle class tax cut in Iowa history, so paychecks can stretch a little further.
Gov. Reynolds: But Fred Hubbell, he wants to repeal the tax cuts so that you keep less. He always seems to care more about his paycheck than yours.
Gov. Reynolds: I know the tough decisions families make and I think you deserve a break.