This November, Iowans will vote on a constitutional amendment that would make it more difficult for the legislature to increase income taxes. Specifically, the amendment would require a two-thirds vote in both houses of the Iowa Legislature to increase individual or corporate income tax rates.
Passage of the amendment itself does not cut income tax rates, raise other types of taxes, or reduce government spending. It changes the number of legislative votes required to approve an income tax increase. This higher threshold would provide taxpayers with a permanent constitutional protection by requiring broader agreement among legislators before income taxes can be increased.
Recent polling found that close to 74 percent of Iowans support making it more difficult to increase income taxes. Support also crossed party lines, including 72 percent of independent voters and 60 percent of Democratic voters.
The protection would apply broadly to Iowa income taxpayers, including families, individuals, business owners, and farmers.
Requiring more than a simple legislative majority to increase taxes is not a new concept, nor a unique one. Several states have adopted some form of supermajority requirement for tax increases, either constitutionally or statutorily, although the taxes covered and the requirements imposed vary considerably from state to state.
The case for such a requirement rests on a straightforward principle: raising taxes should require a greater degree of legislative consensus. Government faces continual demands for additional spending, and when those spending demands outpace revenue, some officials turn to tax increases too quickly in order to balance the budget.
Taxpayers face similar choices in their own lives. When families or businesses have less money available than they would like to spend, they must prioritize among competing needs. It’s reasonable to believe that government should face a higher hurdle before asking taxpayers to provide additional income tax revenue.
Importantly, the amendment does not dictate how lawmakers must set the state budget in the future. It does not require spending cuts, reductions in school funding, or increases in sales or other state taxes. Those would remain separate policy decisions for future governors and legislatures. Nor does the amendment determine local property tax decisions, which are made by locally elected officials under authority granted by state law. The amendment addresses one question: how much legislative agreement should be required to raise state income taxes?
A two-thirds requirement would mean that an income tax increase covered by the amendment could not be enacted by a narrow legislative majority. Lawmakers proposing an increase would instead need to build broader support within the General Assembly.
Iowa has made significant changes to its income tax system in recent years. The state moved from a graduated individual income tax with a top rate of 8.98 percent as recently as 2018 to a flat individual income tax rate of 3.8 percent today.
The proposed amendment does not require Iowa to keep the 3.8 percent rate forever, nor does it prevent a future legislature from raising income taxes. It only establishes a higher threshold for doing so: two-thirds of the members elected to each chamber.
That is the choice Iowa voters will make this November. Rather than deciding the state’s future tax rates, spending levels, or government programs, voters will decide what level of legislative agreement should be required before state income taxes can be increased.
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