The Dickey Dispatch – Feb 1st, 2022
by Senator Adrian Dickey
Hello District 41!
Week three is in the books. That fact is hard to believe. The pressure of the first legislative deadline approaching is clearly felt in the Capitol with many bills finding their way through subcommittee meetings and committee debate. The deadlines are in place to get the bulk of the legislation introduced so it can be studied and debated later in session. While it certainly adds stress in the first few weeks of session, it has great value.
It was a nice surprise during the week to take a short break and visit with Senator Chuck Grassley and Congresswoman Ashley Hinson. Both stopped in provided great insight and updates on their work in Washington, D.C. and their concerns with the problematic policies coming from the Biden Administration. While the outlook on many issues of concern to us was dire, they shared some positive events taking place in Washington and provided words of encouragement for our members. I appreciated the opportunity to visit with them.
Last week the Senate Ways and Means Committee, which I am a member of, released our tax proposal. After hearing the governor’s tax plan addressed in her Condition of the State address, we were able to incorporate some key pieces of her plan, into ours. With our bills together, we have laid out a plan to protect all retirement income from income taxes, reduce Iowa’s high tax rates, and refund the overpayment of income taxes by Iowans.
The highlight of the bill is a major reduction in the income tax Iowans pay. The top income tax rate in Iowa, 8.53 percent, currently applies for earnings over roughly $78,000, a level much lower than other states. Since the top rate starts so low, many middle-income Iowans are paying some of the highest tax rates in the country. When this tax bill is fully implemented Iowa will have a flat 3.6 percent tax rate. Our state tax rate will be the 4th lowest income tax rate in the country instead of the 8th highest as it is today.
The bill also eliminates all taxes on retirement income, expands military pay exemption to full-time National Guard members and provides farmers a first-time pension exemption by exempting income from either cash rent or farm crop shares. Our tax plan also addresses the corporate tax rate, which is almost 10 percent and one of the highest in the country. The combination of these tax ideas will keep retired Iowans from fleeing to states without a pension tax, will attract new businesses to Iowa, and will greatly lower the tax burden for all of us.
Major and permanent income tax relief makes sure Iowans keep more of what they earn. It will also help Iowans bridge the historically high inflation caused by reckless policies in Washington, D.C., and it makes Iowa a beacon of growth and opportunity.
I write this newsletter having just finished my first public forum of the year in Fairfield. Questions the public asked and the conversation they wanted to have dealt with our tax plan and the grave workforce shortage that currently exists in our state. I addressed the tax issues earlier in the “Dickey Dispatch” and next week will have much more to share concerning the labor shortage issue in Iowa and my plan to change that. For the past 10 months, I have been working on a major “re-employment” benefits bill (I refuse to call it “unemployment”) that will change the structure of what our current unemployment benefits plan is. I intend to release my bill early next week, so stay tuned for what is in my plan as I will discuss it further in next week’s “Dickey Dispatch.”
Thank you as always. It’s an honor to serve all of you!
