Many Blue states have budget deficits and declining revenue from the failed policy models of high spending and tax increases. In stark contrast, Iowa’s Red-state model of fiscal conservatism, which is founded on limited spending and pro-growth tax reform, continues to create budget surpluses.
Where does Iowa stand?
In 2022, Iowa led the nation in what Forbes contributor Patrick Gleason described as a “flat tax revolution.” Gleason, who also serves as vice president of state affairs at Americans for Tax Reform, suggests the United States is in a “golden era of state tax relief.”
For the time being, Iowa is still a national leader. Governor Kim Reynolds and the legislature have prioritized tax reform and making Iowa’s tax code competitive. Iowa’s historic tax reform, which will replace the nine-bracket progressive income tax with a flat 3.9 percent rate, is the most transformational.
Governor Reynolds has stated that changes to the income tax are far from over.
Accelerating the 2022 tax rate reductions to go lower than a 3.9 percent flat rate or even placing the income tax on a path of elimination would benefit all Iowa taxpayers. Next year Iowa has the opportunity to continue to be the leader in this “golden era of state tax relief.”
Blue State – Red State Budgets
On the other hand, “Blue” states are going in the opposite direction. New York, New Jersey, and California have all seen a decline in tax revenue.
Many Blue states are now experiencing budget deficits and revenue declines because they have followed the failed policy model of high spending and tax increases. Governments at any level cannot tax and spend their way to prosperity.
In stark contrast, Iowa’s Red-state model of fiscal conservatism is founded on limited spending and pro-growth tax reform continues to create budget surpluses.
Iowa is setting the gold standard that other states should follow.
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