Iowa Senate Bill SSB3189

Iowa 2023-2024 Regular Session

• Introduced: 3/18/24
• Refer: 3/18/24

Caption

A joint resolution proposing an amendment to the Constitution of the State of Iowa by requiring a single rate for individual income taxes.(See SJR 2004.)

Impact

Should SSB3189 be passed, it would amend Article XIII of the Iowa Constitution, significantly changing how individual income taxes are calculated and imposed. By enforcing a single tax rate, the state would remove the option for progressive tax rates and could lead to lower taxes for individuals in higher income brackets while potentially increasing the tax burden on those in lower income brackets. This change could affect state revenue generation and the distribution of tax liabilities among different income groups.

Summary

Senate Study Bill 3189 proposes a significant amendment to the Constitution of the State of Iowa that mandates a single rate for individual income taxes. The bill explicitly states that if an income tax is imposed, it must adhere to a singular rate rather than a graduated scale. This proposal aims to simplify the tax structure by eliminating multiple tax brackets, thereby making the tax system more straightforward for residents and potentially more predictable in terms of revenue for the government. The bill is intended to streamline tax collection and promote economic fairness across different income levels.

Contention

The proposed bill has sparked considerable debate among legislators and constituents alike. Proponents argue that a single tax rate simplifies the tax code, reduces compliance costs, and provides consistent revenue without penalizing higher earners. However, opponents express concerns that it could disproportionately affect lower- and middle-income residents by removing the progressive element of the tax system, which allows for higher rates on higher income levels. Critics also caution that such a change could have implications for the state budget, leading to reductions in funding for public services.