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Iowa tax credit haircut advances

March 17, 2010

The legislative Democrats' plan to trim Iowa's tax credits advanced out of committee this week. The tax committees in each house approved the bills, SSB 3250 and HSB 738, along party lines.

The main elements of the bills are:

- Halving the R&D credit for big companies
- Limiting the cap on certain business tax credits to $120 million, from the current $185 million
- Suspending the film credit for one year
- Setting up an "oversight committee" for tax expenditures, so when the next scandal comes around, they can say it was just an oversight.

As most of these credits are just government spending run through the tax return, they are a natural target when the state is low on cash. Still, the legislature isn't addressing the real issues: are the tax credits worth keeping at all? There's no evidence they do any good. Far better to scrap the credits, lower the rates, and let us keep our money without running it through the Department of Revenue first. Something like the Quick and Dirty Iowa Tax Reform Plan.

More coverage:

Iowa Independent

O. Kay Henderson

Tags: Corporate welfare.Economic development.Iowa Independent.Iowa tax policy.O Kay Henderson.Quick and Dirty tax plan.tax credits.