(Des Moines, IA) — A bill passed by Republicans on an Iowa Senate committee would phase out the state inheritance tax.
It would also accelerate the plan to phase in state income tax cuts. Democrats oppose the moves, warning the state’s budget could take a billion-dollar hit in a couple of years.
Senator Pam Jochum from Dubuque said the original plan in 2018 put “guard rails” in place, so income tax cuts were only triggered if total state tax revenue rose to certain level.
G-O-P Senator Dan Dawson of Council Buffs said for Iowa to be more competitive, the tax burden must be lowered.
Under current Iowa law, children, grandchildren and great grandchildren pay no income tax on inherited property. Brothers, sisters and in-laws pay between five and ten percent while uncles, aunts and cousins could pay up to 15 percent.
