The largest state tax cut in Iowa history is now law after Governor Kim Reynolds signed Senate File 2417 into law.
The law cuts more than $2 billion in a six-year period. Governor Reynolds signed the bill on Wednesday at MobileDemand in Hiawatha. She said the cuts stand to help Iowans and small businesses like MobileDemand, which specializes in creating rugged cases for tablets.
"The new tax plan will unleash opportunity across our states and help families that are struggling to make ends meet. I’m signing the bill for every Iowan who works hard to earn a paycheck and deserves to keep more of it," Reynolds said.
According to a study done by the Iowa Department of Revenue, middle-to-upper classes stand to see the most in overall savings. Iowans collectively will see an average of $300 in savings per year.
The study shows Iowans making $50-$60,000 a year could see a savings around $150 per year. Incomes of $1 million or more could see as much as $25,000 in savings throughout a year. Whereas, Iowans with an income of $20,000 or less will only see about $18 per year.
Democratic opponents say the bill does too little to help low earners and does too much for high earners. Gov. Reynolds rebutted Wednesday, saying all savings matter.
"I know that every single extra dollar in a paycheck matters and I hear that from Iowans as I travel across the state. People might think $50 isn’t that much well it is. It makes a difference. It’s groceries, it’s gas. It’s new shoes," the governor said.
The owners of local small businesses, MobileDemand and Aurora Coffee, spoke prior to signing saying the cuts will also help their businesses.
Under this bill, top corporate businesses will see a tax deduction from a 12% rate to 9.8% by 2021.
"We pay taxes, my business pays taxes, a lot of them. So, I am grateful for this bill about to be signed," Aurora Moes said.
Outside of the signing, a handful or protesters gathered against the bill.
"To sign this bill for providing tax cuts for the wealthy it just doesn’t make any sense because we are trying to increase funding for education, mental health, for funds like domestic violence. It’s really important that we make sure we are providing for all Iowans just not the wealthy," Ashley Burns said.
The bill saw no support across the aisle from Democrats, but Reynolds says without passing it Iowans would have seen higher taxes do to federal tax reform.
"If we did nothing, their taxes would have gone up," she said.