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Do states with low income tax see more growth than states with high taxes?
7th February 2022 • The Gazette Fact Checker • The Gazette
00:00:00 00:28:05

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Iowa Sen. Mike Klimesh, R-Spillville, wrote in a Jan. 14 legislative newsletter about legislative proposals to ensure Iowans “keep more of their hard-earned money.” Democrats have criticized these plans as disproportionately benefiting higher wage earners.

Gov. Kim Reynolds has proposed a 4 percent flat tax rate, which would be less than half the current top Iowa income tax rate if approved. The House and Senate have both unveiled different packages that staff estimate would provide $1.7 billion and nearly $2 billion in tax relief, respectively. Those both carry higher price tags than Reynolds’ $1.6 billion proposal.

The governor’s proposal also calls for a gradual reduction in the corporate tax rate each year revenue surpasses $700 million, until the top rate is 5.5 percent. The Senate proposed a five-year gradual reduction of the top rate from 9.8 percent to 7.8 percent, while the House plan does not make any changes.

“Data has long shown the states with low or no income tax grow more quickly than states with high, punitive tax rates,” Klimesh wrote.

The Fact Checker team checks statements made by an Iowa political candidate/officeholder or a national candidate/officeholder about Iowa, or in ads that appear in our market.

Claims must be independently verifiable. We give statements grades from A to F based on accuracy and context.

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This episode of the podcast is researched and hosted by Marissa Payne and features Elijah Decious, Erin Jordan, and Michaela Ramm. The Fact Checker Podcast is produced by Stephen M. Colbert and music is Lobby Time by Kevin MacLeod.