Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

AT LEAST THE REVENUE LOSSES WILL BE MINIMAL

January 25, 2005

The latest plan to restore economic vitality to Iowa:

   Iowans under age 30 would pay no state income taxes
   under an economic development plan unveiled today 
   by Senate Republicans.

   "More than half of our college graduates leave the 
   state after graduation. We want to reverse Iowa's 
   brain drain and make our state a more attractive place 
   for our young people," said Senate Republican 
   Co-President Jeff Lamberti of Ankeny.

It's tempting to liken this proposal to a "kids eat free" special in Sun City, but we won't sink so low.

There's more:

   The GOP plan also would give businesses a tax credit 
   for newly created jobs paying at least $10 an hour. 
   The tax credit would be available for up to five years, 
   with a maximum annual credit of 20 percent of the 
   salary.

By our count, Iowa already has 19 different economic development credits, including the "industrial new jobs creation credit." If targeted tax credits were the key to economic development, Iowa would be the nation's economic juggernaut.

   Senate Republicans also proposed setting aside $25 
   million per year to help companies with the cost to 
   build or renovate business facilities. 

Apparently banks and investors can't be trusted with this.

   A state fund for assisting local governments with the 
   development of community attractions would increase 
   from $12 million to $25 million annually over five years.

So that's why the kids leave. Not enough government-financed attractions.

Here's an idea: eliminate a bunch of counties, consolidate government functions, get rid of all of these credits and special deductions, and reduce the tax rates. Somebody should try it sometime.

      Bookmark: del.icio.us • Digg • reddit