When the Republican-controlled Iowa House and Senate approved large tax cuts in 2018, not a single Democrat voted for the legislation. Critics pointed out that the bill hailed by Governor Kim Reynolds was skewed to provide most of the benefit to wealthy people, with little savings for middle class Iowans.
Much of that bill went into effect immediately, but lawmakers put some portions on hold until 2023, provided that state revenue hit certain targets. In her annual address to legislators in January, Reynolds called for eliminating “the unnecessary triggers that were put in place in 2018,” so all of the tax cuts would go into effect.
Republicans embraced that idea in Senate File 576, which would take out the triggers and phase out Iowa’s inheritance tax by 2024. Democrats didn’t support the bill when the Senate’s tax-writing committee voted on it this month. But a surprise to many observers, including the GOP floor manager Dan Dawson, every senator from both parties voted for Senate File 576 on March 17.
Why did Democrats come around to supporting a bill that is estimated to reduce state revenues by more than $100 million annually, beginning in fiscal year 2023?