DeSantis Suggests Eliminating the IRS and Establishing a Flat Federal Tax

Florida governor Ron DeSantis (R.) called for the abolishment of the IRS during a CNN town hall in Iowa as he makes his final few pitches to the voters of the Hawkeye State. DeSantis said, “I want to eliminate the IRS, and I would like a flat — one single-rate flat tax.” He went on to explain Florida’s successes with lowering taxes while maintaining budget surpluses then used to pay off previous debt.

While DeSantis’s call to level the IRS and its loopholes may strike the casual viewer as either a move of desperation for a flagging campaign or simply a favorite tease on the GOP primary stump, it’s worth noting here that Iowa is in the midst of transitioning to a flat 3.9 percent income tax after years of a nine-tier progressive system. Similarly, the state’s corporate tax rate is incrementally descending from 12 percent to a “flat 5.5 percent,” according to John Hendrickson and John Phelan for National Review.

Furthermore, the popularity of decreasing taxes appears to extend far beyond a few cigar-smoking grain traders. The Des Moines Register reported in early 2023 that:

Fifty-eight percent of Iowans say they favor initiatives to “cut property taxes, limiting what local governments could spend on services.” Thirty-four percent are opposed and 8% are not sure.

And 56% of Iowans favor “gradually reducing the state’s individual income tax rate until it is eliminated.” One-third of Iowans are opposed and 11% are not sure.

The poll of 805 Iowa adults was conducted March 5-8 by Selzer & Co. It has a margin of error of plus or minus 3.5 percentage points.

Hendrickson and Phelan then look to progressive Minnesota, Iowa’s northern neighbor:

 [Minnesota’s] Democratic-Farmer-Labor state government went into the last legislative session with a forecast budget surplus of $18 billion. Not only did they spend every cent of that, but they hiked taxes and fees by $10 billion on top of that. Indeed, Minnesota’s state-government spending will be 33 percent higher in 2027 than it was in 2022.

While observers are quick to cry “Kansas” at tax-cutting states, they do not do so to tax-hiking ones like Minnesota. This is despite that fact that the new, ongoing spending in the Gopher State’s budget is funded by new taxes, such GILTI and on investment income, which are pro-cyclical: If the economy tanks, Minnesota’s budget is back in deficit.

Many progressive states that are following a policy agenda of high taxes and spending are not only confronted with fiscal crisis but are also experiencing a mass exodus as people and businesses flee their high tax rates. Census Bureau data show that, in 2022, Minnesota lost residents on net to each of its neighbors, including Iowa. When people vote with their feet, they prefer what Governor Reynolds is offering in Iowa.

Whether Iowa voters, who currently favor Trump 51 points to DeSantis’s 18, according to the RealClearPolitics polling average, will be convinced by their state’s tax-cutting success to support the same at a national level, seems unlikely. But if anyone’s open to considering the possibility, it’d be the frugal Dutch-descended Iowans.