President Biden signed the American Rescue Plan Act (ARPA) into law last March. Included in this law was a provision preventing states from using ARPA funds to pay for tax relief.
In response, Governor Reynolds joined 12 other states in a lawsuit fighting back against this historic assault on the division of political power between the states and the federal government.
This week, a federal district court ruled in favor of a 13-state lawsuit prohibiting the Biden Administration from enforcing the terms of this brazen attempt to undermine states' rights.
Response from Governor Reynolds:
"This is a major victory for the State of Iowa and Iowa taxpayers," said Gov. Reynolds. "The Biden Administration was trying to punish fiscally responsible states like Iowa, which has a record budget surplus, and that's why we took legal action.
With this ruling, Biden's Administration can't keep us from cutting taxes, and I look forward to doing just that."
ITR's Take:
With this dangerous Biden Administration policy defeated, lawmakers can now move forward with even greater confidence to deliver tax relief in the coming legislative session.
Iowa is on track to hold roughly $2 billion of excess taxpayer money at the end of the current fiscal year. Instead of government sitting on this massive stockpile of taxpayer money, these funds should be used for permanent, structural income tax relief.
It has been a good year for tax reform. So far, 14 states have enacted tax reforms, and it appears many states, including Iowa, are poised to keep reducing the tax burden on their citizens.
ITR's Take:
The key element to strengthening Iowa's economy and making the state more competitive is a tax code that allows economic growth and creates opportunities for Iowans.
States compete with each other as it becomes easier for businesses and individuals to relocate, and census data shows tax climate matters. Some economists have described this current era as "enhanced competition" among the states.
Years of conservative budgeting practices and an economy that remained open and productive have put Iowa in an enviable position. The state's coffers aren't just full; they're bursting at the seams. Iowa's $1.24 billion budget surplus provides a historic opportunity for significant pro-growth tax reform.
In 2022, policymakers have an opportunity to build upon past tax reforms and allow Iowa families and businesses to keep more of their hard-earned income.
A Bloomberg Opinion columnist says Americans should expect less and learn to live like the Europeans—with a far lower standard of living.
ITR's Take:
No thanks.
"Americans have come to expect that store shelves be well-stocked, and rightly so; it has been that way in this country for decades," says Texas Public Policy Foundation's E.J. Antoni. "Americans are now witnessing a phenomenon that is not native to these shores. Empty store shelves are the result of governmental interference in the economy, a hallmark of socialism."
