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G.R.O.W.? L.A.M.E.

March 04, 2009

Iowa House Republicans really know how to kindle political passion:

Yesterday, freshman members of the House Republican caucus rolled out the party’s plan to put Iowan’s back to work and improve the state’s economy. The G.R.O.W. (generating recovery and opportunity for working Iowans) plan uses a variety of methods such as tax credits, tax deductions and constitutional protections to lift Iowa’s slumping economy.

Tax credits and deductions! That's the ticket! Iowa only has about 3 dozen economic development tax credits, making us only the second worst state to start a business. A few more credits and deductions will surely make Iowa an economic dynamo and win back the legislature for the Republicans. Right after I perfect my four-foot vertical leap.

Some of the proposals are defensible, if improbable ("Constitutionally protect Iowa’s Right-to-Work law"). Others are just wimpy and silly:

-Student loan interest deduction expansion. Unfortunately, that won't do much for the students who need to leave the state to find work.

Telecommuting tax credit. If telecommuting will work for a business, they don't need a tax credit to help them figure it out. If they are going to allow telecommuting anyway, it's just a subsidy.

Shovel-ready permits. Shovel ready!

Social Security tax deduction. Why not just cut tax rates?

Small business internship grant expansion. Somehow I think this may fail to win back the House for the Republicans.

Increase research activities credit (RAC). This is another straight subsidy awarding companies most willing to call what they do anyway "research."

Property tax freeze.

"This proposal will place a prohibition on increasing property taxes by tying assessment limitations of residential, agricultural, commercial property together and apply the lowest percentage increase to industrial property."

So it's not really a freeze; it just locks into place the current disparities in the property tax system.

All of these little nibbles amount to a big yawn. Why don't they try something really bold:

- Eliminate the corporation income tax
- Reduce the Iowa individual tax rate to 4% by eliminating all the special deductions, exclusions and giveaway tax credits like the 50% Hollywood subsidy. Oh, and get rid of federal deductibility.
- Eliminate the Iowa Power Fund, Vision Iowa and all of the other lame excuses for politicians to steer money to their friends.
- Move for a constitutional limit on spending based on economic and population growth.

If you are going to fight for something, at least make it worth the fight.

Tags: corporate welfare.economic development.iowa tax policy.