Iowa’s taxes below national average, new report shows
Iowan’s pay less than the national average in state and local taxes, a new report released today from the Iowa Fiscal Partnership.
The report is based upon the total taxes collected based as a percent of personal income.
Total state and local taxes in Iowa represented about 10.4 percent of income, below the national average of 10.9 percent and ranking Iowa 26th among the nation’s 50 states.
Most neighboring states ranked higher except for Missouri with 9.3 percent and South Dakota with 8.1 percent. Wisconsin and Minnesota paid more than 11 percent of income in taxes, the report shows.
Iowa’s tax climate has improved since the early 1990s, according to the report. Iowa ranked 12th between the fiscal years of 1991 and 1995 but dropped to 26th in the latest report, based upon taxes paid in the fiscal year that ended June 30, 2009.
“What we find is that first of all tax levels in Iowa from the early 90s to the present day have actually declined and fairly significantly,” said Iowa Policy Project Research Director Peter Fisher. “They’re taking a smaller percent of income now than they did in the early 90s.”