Governing magazine crowned Gov. Kim Reynolds among 2024’s leading public officials, lauding conservative reforms that slashed Iowa’s punishing 9% income tax to a lean 3.8% flat rate by 2025.
Now she’s targeting an even thornier challenge: overhauling Iowa’s tangled property tax system. If she succeeds, it will be a new roadmap for other states to tackle their own pro-growth reforms.
Iowa’s property tax burden ranks a disappointing 44th nationwide, according to the Tax Foundation’s state tax climate index. Only Illinois fares worse among neighboring states, while Nebraska is scrambling to improve its 40th-place standing.
The crush of these levies leave many Iowans feeling like tenants, perpetually paying rent to government landlords.
Property taxes also act as a wealth tax, punishing homeowners for paper valuations that ignore their actual bank balances. It’s easy to blame assessment methods. While this matters, it is not the cause of high property tax bills and too much focus on assessment leads to not only poor reform, but also failure to provide meaningful tax relief.