The study, conducted by the business-forecasting publication Kiplinger, reported that Iowa has the twelfth-highest average property taxes in the nation.
Iowa ranked No. 41 in a recent study of the least tax-friendly states in the nation.
The study, conducted by the business-forecasting publication Kiplinger, reported that Iowa has the twelfth-highest average property taxes in the nation, as well as high-income taxes. However, what pushed the state so low in the overall rankings was the additional income tax levied by individual school districts. According to the report, “One reason why income taxes are on the high end in the state is because over 200 school districts and Appanoose County add their own income taxes on top of the state-level tax.”
In addition to income and property taxes, Iowans pay 30.5 cents per gallon on gasoline, an average state and local sales tax rate of 6.82 percent, and even an inheritance tax.
There has been some progress in lowering taxes. In 2018, the state legislature approved an income tax cut that will benefit both individuals and corporations. The corporate tax rate will lower from 12 percent to 9.8 percent in 2021, and the top income tax rate will go from 8.53 percent to 6.5 percent when a specific revenue trigger is met.
Even after these tax cuts go into effect, Iowa’s tax rates will still be high. With business owners struggling to find qualified employees, legislators in Des Moines need to re-examine tax policies that discourage employees from moving to the state.
