Iowa’s Sky-High Taxes Takes GOLD!
For those couples that earn $75,000 a year Iowa has a present for you, the highest income taxes in America. That’s right, you heard right. I know, you thought Oregon’s 9% State Income Tax beat Iowa’s 8.98% but Iowa has surtaxes so they take the Gold Medal in sky-high taxes. California’s taxes are higher on very high income movie stars but not on a modest $75,000 a year. Iowa has the highest income tax on modest incomes yet the State’s bank account is empty! The good news is that with the highest tax rate the Iowa people save more on Income Tax with the tax-free HSA than any other State. But, I will admit, the best tax cut is NO taxes, in any State. What are Iowa politicians thinking?
Future US Representative Dr. Christopher Peter’s district includes Keokuk, Iowa for this example. The good Doctor supports President Trump’s larger HSA deposits of $13,300 per year per family in 2018. This example uses the current maximum deposits of $6,550 per family. This example is an Iowa small business, a construction company, who employs carpenters in Keokuk, Iowa.
Small businesses save big time with tax-free Health Savings Account (HSA) employer deposits.
Iowa construction company – employee and employer savings (Couple earning $75,000/year)
Carpentry – Class Code 5403 – HSA deposit $6,550
Employee Savings & Employer Savings
Federal Income Tax……….25% $1,637.50
State Income Tax….…….8.98% 588.19
Payroll Tax………….………7.65% 501.07……………………..Employee saves $2,726.76
Payroll Tax…………………..7.65% $501.07 (Employer)
Workers’ Comp….……….15.22% 996.91 (Employer)……Employer saves $1,497.98
Total savings: $4,224.74
It’s smart when employers and employees band together and cut the IRS – OUT!
The savings is larger because Iowa taxpayers also pay a School District Surtax on their State Income Tax. For example in Keokuk, Iowa the surtax is 18.92%. This is an additional $111.28 added to the $588.19 Iowa State Income Tax above. The effective income tax rate is 10.67% which is the highest in the Nation at an income of $75,000 a year. Iowa has the highest State Income Tax savings with HSA deposits at this modest income level. If the above carpenter lives in Keokuk his real savings is $111.28 more or $2,838.04. The combined savings for employee and employer increases to $4,336.02 on the $6,550 HSA deposit setting in the employee’s bank account.
As your State Income Tax increases so does the value of the tax-free HSA for people. HSAs turn sky-high taxes and premiums into assets for employees. HSAs are compensation without taxation.
Iowa needs new leadership / Vote Dr. Christopher Peters