Iowa Senate approves constitutional amendment requiring flat income tax rate

The Iowa Senate has approved a constitutional amendment that would require Iowa to have a flat individual income tax rate — if the state imposes an income tax at all.

The Senate voted 34-15 Tuesday to pass Senate Joint Resolution 2004, with every Republican in favor and every Democrat opposed.

The proposal would require an individual income tax imposed by the state to be a single rate. It would forbid having a graduated income tax system with multiple rates based on income level.

If the proposed amendment passes the House this year, lawmakers would have to pass the measure again in 2025 or 2026. It would then be placed on a statewide general election ballot and would require majority approval to be added to the constitution.

Gov. Kim Reynolds signed a law in 2022 that will take Iowa to a flat income tax rate of 3.9% by 2026. The law is still in the process of phasing in. The state's top rate this year is 5.7% and will drop to 4.82% next year unless lawmakers make further changes.

From 2022: Here's when Iowans can expect to see tax cuts kick in from the new law Kim Reynolds signed

Sen. Jason Schultz, R-Schleswig, said it's appropriate to allow Iowans to decide whether they want to effectively make the policy permanent by adding it to the Constitution.

"If you want this for the rest of Iowa’s future, ladies and gentlemen of Iowa, here it is," he said. "You get to vote for this. You get to put this in the Iowa Constitution for perpetuity."

Sen. Cindy Winckler, D-Davenport, criticized Republicans for rushing to put a flat tax rate in the Iowa Constitution while the state is still phasing in the cuts. She said doing so could harm the state's ability to fund government programs in the future.

"Taxes are not necessarily things that people want to pay," she said. "But services are what they expect to receive. And that balance is important. We have a responsibility, and that responsibility rests with the government and rests with the Legislature."

Reynolds and Republican lawmakers have proposed speeding up how quickly the flat tax phases in and are considering lowering the rate further.

Reynolds proposed lowering the rate to 3.65% for 2024 and 3.5% in 2025 and beyond. The chairs of the House and Senate Ways and Means Committees are negotiating their own tax plan.

More: Kim Reynolds wants to cut Iowa taxes — again. Here's how it would work and who gets a break.

Republicans are also separately considering another proposed constitutional amendment this year that would require a two-thirds vote of the Iowa Legislature to raise taxes in the future.

That measure, House Joint Resolution 2006, has passed the House but has yet to be taken up by the Senate.

Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@registermedia.com or by phone at 515-284-8169. Follow him on Twitter at @sgrubermiller.

This article originally appeared on Des Moines Register: Senate approves constitutional amendment requiring flat income tax rate