Iowa State Director Matt Everson, along with John Hendrickson, policy director for Iowans for Tax Relief, penned an opinion piece that ran in the Des Moines Register about the importance of ensuring the provisions in the Tax Cuts and Jobs Act are made permanent.
You can visit the Des Moines Register here or read a copy of the op-ed below.
At the center of America’s heartland, Iowans are becoming more concerned with inflation and the growing economic uncertainty. “Bidenomics” is not working, and, to make matters worse, Iowans, as well as taxpayers across the nation, are facing a major tax increase in 2025 unless the Tax Cuts and Jobs Act (TCJA) is renewed or made permanent.
Some of the key TCJA provisions that are set to expire are the reductions to personal tax rates and the increase in the standard deduction, among other crucial reforms. Many small-business owners pay their taxes through the individual income tax code, and the TCJA included a 20% deduction of qualified business income, which is also set to expire.
This means that individuals and small businesses across the nation may be hit with a nearly $4 trillion dollar tax increase on top of continuing inflation. The historic TCJA, or the “Trump Tax Cuts,” achieved tax reform and created a period of economic growth. Further, it helped spur what has become known as the “state income tax cut revolution.”
In Iowa, just as in other states, individuals and businesses benefited from the TCJA. Many small businesses were able to expand, hire additional workers, and even provide bonuses. Many workers experienced a significant increase in their earnings as a result. Work was plentiful, and wages increased.
The TCJA also helped spur a pro-growth fiscal agenda in Iowa. In 2018, Gov. Kim Reynolds and the Republican-led Legislature made tax reform a priority. As a result, through a series of income tax reform measures, Iowa has gone from a progressive income tax system with a top rate close to 9% to a flat 3.8% rate starting in 2025. With a 3.8% flat tax in 2025, Iowa will have the sixth-lowest income tax rate in the nation. The combination of Reynolds’ pro-growth tax reforms and the TCJA allows taxpayers to keep more of their hard-earned income.
Critics wrongly place blame on the TCJA for causing deficits and only providing “tax cuts for the rich.” Both are false. Nominally, the federal government actually generated more revenue under the TCJA, and the reason why large deficits persist and the national debt continues to increase is not the result of tax cuts, but the failure to control spending.
The Congressional Budget Office recently projected that public debt is projected to reach $50 trillion by 2034. The federal government clearly has a spending problem that is not only responsible for the deficits and debt, but also for inflation.
Individuals and small businesses should not foot the bill for the federal government’s reckless spending.
The TCJA was a clear benefit to individuals and small businesses, and it must be made permanent.
