Hawkeye Reporter

As part of a series of indexes to educate the public, the Tax Education Foundation (TEF) – Iowa released Iowa’s Tax Burden guide comparing the state’s 2019 individual income, corporate income and sales tax rates with other states throughout the U.S.

The data shows that Iowa has the ninth highest individual income tax (8.53 percent), the highest corporate income tax (12 percent), the 26th highest sales tax (6.80 percent) and the 13th highest property tax rate (1.44 percent) in the nation. This data, compiled by the TEF using information from the U.S. Census Bureau, gives Iowa the fourth highest overall tax burden in the United States.

John Hendrickson, Policy Director of TEF – Iowa, explained that the index was created to inform Iowa taxpayers of the total cost of state government, which is $11,292 per resident.

John Hendrickson, Policy Director of TEF – Iowa | https://www.tefiowa.org/

“We believe that fiscal issues [should] be transparent . . . but just to give taxpayers an idea of what a government is costing, both from a state and local perspective in Iowa, “ Hendrickson told the Hawkeye Reporter. “Then we also compared this to some of our region and our neighboring states, and we’re not necessarily the highest, but we’re certainly up there.”

Hendrickson mentioned that Iowa’s ranking not only reflects the state’s multiple high tax rates but also its spending budget. Education and Medicaid are some of the costliest “budget drivers,” he said.

“One thing we would argue is that Iowa tends to have high tax rates, not just high property taxes, but also high income and corporate taxes," Hendrickson said. “In fact, we have the highest corporate taxes in the nation at 12 percent. Now, thl Legislature has done some good work in doing some tax reform in 2018, but the purpose of this [guide] is to give more information on the budget process. This Iowa transparency book is a good tool that will give citizens sort of an understanding of Iowa's state budget.”

The index derives from a larger TEF newsletter titled Iowa Budget Transparency, which provides readers with a snapshot of Iowa’s state budget based on the taxes collected, the amount of each tax and the percentages of those taxes in addition to how the money is being spent.