Letter to the Editor

Tax talk

Thursday, March 30, 2017

It’s about the middle class in Iowa! Many have talked about the bold agenda that Iowa Republicans are advancing this year in the Iowa Legislature. Our efforts have returned a voice to the Iowa taxpayer and limited government that has been unprecedented. These efforts have been done with two things in mind. First, to ease burdens on business to allow for economic growth and expansion and second, to allow for economic growth in the middle class. The things we have accomplished to date have given us a strong foundation in which to build a strong middle class economy. No economy has thrived in the United States or in Iowa without a strong and thriving middle class. 

The important part, and probably the hardest thing to accomplish, has yet to be done. That part is comprehensive tax reform in Iowa. A lot of discussion has been held in regards to tax credits and tax exemptions. Those credits are needed to make Iowa attractive to people and business. We can’t have a strong middle class on the backs of those same folks so that we can offer tax credits to others to entice them to move to Iowa. 

CORPORATE TAXES

Iowa ranks 47th in the nation in the corporate tax rate. This rate that puts our state nearly last in the ranking leaves us in a very non-competitive position nationally, but even when looking at our neighboring states, we are the most taxed corporate rate. To put it another way, the closest state to Iowa in the Midwest is Illinois and they are ranked number 44 in the nation in corporate taxes. 

PERSONAL INCOME TAXES

Iowa ranks number 33 in the nation in personal income taxes. When looking at our neighboring states, two of them are higher than us; Minnesota and Wisconsin. South Dakota, which just became the “most moved-to state in the nation,” happens to be the number one state in the nation in personal and corporate taxes. 

SALES TAX

Iowa ranks in the middle of our nation in sales tax rates at 21st. When compared to our neighbors we sit as one of the lowest sales tax states in the region. Many feel the sales tax or a consumptive tax is the fairest tax, in that you pay a tax only when you buy something. In Iowa, we do not pay sales tax on items that are typically thought of as necessities such as food and prescribed drugs. 

PROPERTY TAX

Iowa ranks 40th in property taxes and once again we are leading in the wrong way on this tax issue. Of our neighboring states, we are the leader, except for Illinois. When looking at being competitive for business and individuals who are looking at buying property this is a negative and is one of the main reasons for some of our tax credits and tax relief for economic reasons. 

STATE BUSINESS TAX CLIMATE

When we boil this all down, and determine where Iowa lies as a competitor in the nation, Iowa ranks number 40. That leaves Iowa in a negative climate from the start when trying to lure business and industry to our great state.  When we look at the region, only one other state, Minnesota, has a worse business climate than Iowa. South Dakota, a major competitor for northwest Iowa jobs and business is ranked No. 2 in the nation. It’s small wonder why those business and industry move or relocate where they do. 

I bring all these statistics and figures to show one thing: We need tax reform in Iowa and now, despite the slowdown of our economy, is the time to do it. The question is … how do we do this and keep vital programs and services? I favor repealing most, if not all tax credits, cutting our budget, reduce and flatten our tax rate for individual and corporate taxes and increasing the sales tax by a penny. Doing these things will bring most of our taxes down to a more competitive rate and spur our economy like nothing else we have done thus far this year.

This year we have made our state’s foundation strong and firm. That will provide the base we need in which to move on from here. Now is the time to work on the rest of the solution to making our middle class strong and vibrant which will in turn make our state’s economic prospects strong and vibrant. It will be an uphill climb and a tough prospect but not one that is impossible. I would be happy to answer any questions or thoughts on this.

As always, I appreciate the faith you have in me to represent you in the Statehouse. I vow to bring our northwest Iowa values to the concrete of Des Moines and represent you in the best way I can.