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THOSE WACKY LEGISLATORS!

April 05, 2007

As it enters the final weeks of its 2007 session, the General Assembly is turning into a frenzy of bad tax policy. Take yesterday:

The Senate Ways and Means committee voted unanimously to make chumps out of people who pay their taxes by approving an amnesty (SSB 1168) plan for those who don't. The companion bill for this shortsighted budget gimmick was introduced in the Iowa House (HF 893), and it no doubt will slide right through.

THE LEGISLATURE GIVETH

Meanwhile, two new tax credit bills were thrown into the hopper, providing special tax breaks for a few and shifting their tax burdens to the rest of us. SSB 1349 would give a whopping 50% tax credit for donations of up to $100,000 of land for conservation purposes; meanwhile a new amendmnet to HF 883 would give teachers a $250 credit for school supplies purchased.

These are classic examples of good intentions run amok. There are already generous federal tax benefits for donations of conservation property. This 50% credit is huge - far more so than the federal benefits. These two credits would result in tax breaks equal to over 80% of the value of donated property. Meanwhile, the various ethanol breaks provide incentives to reduce conservation and plant fencerow to fencerow. It's like sleeping pills to get you to sleep and meth to wake up.

The teacher credit has the double disadvantage of favoring a specified profession and providing a tax benefit that's too small to audit. Cynical teachers will take the credit, whether they spend $250 on their kids or not, knowing that there is almost no risk that they'll be required to substantiate the spending. Other teachers will save their receipts, take only the credit their entitled to, and feel like schmucks after talking to the cynics in the Staff Room.

THE LEGISLATURE TAKETH

Meanwhile, SSB 1350 was introduced to deny pollution control property tax credits to large farms; we don't want to encourage the farms that can make the biggest messes to buy the latest pollution control equipment, after all. Don't even think of repealing this special tax favor entirely. And HSB 305, the "Satellite Video Equalization Tax," was introduced to stick it to satelitte providers who enable users to bypass the government-mandated local cable monopoly.

THE LEGISLATURE FLIPPETH OUT ENTIRELY

Finally, in a stunning non-tax display of delusion, we saw the introduction of HSB 304, "An Act establishing the office of energy independence and the Iowa power fund ..." The idea that Iowa could be, or should be, "energy independent" is so incredibly ridiculous, only a legislator could talk about it while looking earnest. So we're going to re-open the strip mines of Davis County? There's certainly still coal underneath the new subdivisions in Waukee; if we're really serious about this energy independence thing, we can just drop some mine shafts in people's backyards, I'm sure nobody will mind if its in the name of "energy independence." Unless, of course, it's just a cynical and inane excuse to pass out taxpayer money to buy votes or something.

The heydey of Iowa energy independence.

Follow all Iowa 2007 tax legislation at our 2007 Iowa Tax Legislation page.

 • Eye on the Legislature: 2007       Bookmark: del.icio.us • Digg • reddit