Gov. Kim Reynolds today unveiled a tax reform package she claimed will be a boon to owners of small businesses and to middle-class workers, farmers, families and teachers.

The package calls for a lower tax rate, phasing out of the state tax deduction for federal taxes, a doubling of the standard deduction and specific breaks for teachers.

Here are some of the highlights of the governor’s news release: 

• Tax rates would be cut up to 23 percent, or up to $1.7 billion by 2023. The top rate of 8.98 percent — the fourth-highest in the nation — would be reduced to 6.9 percent by 2023 and would only apply to income above $160,965. That rate now applies to incomes above $73,260.
• The deduction of federal taxes on state returns would be phased out. The plan also would change other parts of the code to prevent the federal tax reform legislation from increasing Iowans’ taxes. That has been a key goal of many business groups, including the Greater Des Moines Partnership.
• The standard deduction would jump to $4,000 for single filers, up from $2,070, and to $8,000 from $5,090 for married filers. The elderly and blind would get an additional standard deduction of $1,500 in 2019, rising to $2,070 in 2021.
• The alternative minimum tax would be eliminated.
• The tax rate for some high-income workers would drop from nearly 9 percent to 6.9 percent by 2023. Some middle-class families would see the tax rate drop from 7.92 percent to 6.3 percent.
• Teachers would get bigger tax savings when they buy school supplies for their classrooms.

Republican legislative leaders, who control the Iowa House and Senate, have made tax reform a top priority for this session. Democrats have questioned the lack of cuts in corporate tax credits, and have contended that the state can’t cut its way to prosperity. 

See our preview of the session.