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Looking for tax ideas in all the wrong places

March 05, 2009

The Iowa Senate Republican Leadership has launched what it calls an "ambitious jobs creation initiative." It doesn't seem like their ambitions have much to do with becoming a majority, if this is the best they can come up with.

The plan has three parts:

- A tax credit for every new job created at the level of 50 percent of the annual salary.

- Create the position of small business ombudsman.

- create an 11 member task force that will head out into our communities to cultivate ideas and look for entrepreneurial Iowans who may not have the knowledge or tools to go about starting a business.

Yes, those 11-member task forces are just what voters are clamoring for. That's just what we need - somebody from the government to help start a business. That's like hiring somebody from the morgue to advise you on wellness.

The tax credit is actually an idea from the original Obama stimulus plan that was deemed too absurd for even the Democratic Congress to embrace. From Tax Vox:

Refundable tax credits for hiring new workers promise to be an administrative nightmare and won't create many new jobs. It is tough to see how a company that is seeing its sales slaughtered in today’s recession is going to hire just because it gets a few thousand dollars per new worker from the government. Profitable firms would merely take the credit for bringing on workers they were already planning on hiring.

Exactly. Like economic development credits in general, they would be harvested by companies looking to be rewarded for what they would do anyway.

Rather than piddle around with these silly and futile ideas, why don't they propose something really bold and ambitious:

- 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.

More: Is this all you got?

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

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

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