COLUMN: Tax burden hurting Iowa expansion
February 20, 2003
As much as Iowans would like this state to grow, it is generally not attractive to those who would make it prosper. For years now we have been concerned with keeping graduates in the state and pushing Iowa’s economy to create jobs. Vilsack discussed this yet again in the Condition of the State address. “With our strong values, no Iowan should be satisfied if bright Iowans leave, believing there is no meaningful opportunity here.”
It is easy to say that we should create new opportunities in Iowa, but how exactly do we do that? It is an important issue because the government uses your dollars to fund programs designed to keep graduates in the state.
Think for a moment on what would keep you, the student, in the state after you graduate. Vilsack thinks you might stay if you had a rainforest to visit in Corralville. How about a Mississippi River Discovery Center? Alton Historic Museum? If so, your dreams are currently under construction in their perspective locations. Locally, we’re scheduled to get a $7.5 million “wetland ecosystem” for our entertainment. Take a look at www.vision iowa.org to check out some other marvelous projects you’re funding.
I’m not saying the state of Iowa shouldn’t provide any funds for community development. However, there needs to be more discretion with the funds awarded to communities. Common sense tells me you don’t need a convention center in a town of 675.
If this can’t be called government waste, I don’t know what can. If Vilsack gets what he suggests in his Condition of the State address, Vision Iowa and The Iowa Values Fund will cost the taxpayers $800 million. To that amount you can add millions of dollars of interest payments that the government will owe after issuing “Vision Iowa Bonds.” And to that amount you can add the millions of dollars of spending required to set and maintain such a program.
And Iowans are over-taxed.
Based on 2002 numbers given by the Tax Policy Center, Iowa has the fourth-highest income tax rate in the country. Not only do we have such a high rate, the government has decided you are rich when you hit $54,500, as that puts you in the highest tax bracket. Is this supposed to be an incentive to live in Iowa? The government spends hundreds of millions on public sector enrichment while the private sector remains dull. Businesses need reasons to set up shop here, and an Adair convention center is not one of them.
Business will flourish in an environment that is friendly to them. What conditions stimulate growth? Certainly not exorbitant tax rates.
By exorbitant I mean the highest corporate income tax rate in the country. How can our governor dedicate half of his Condition of the State speech to economic stimulus when we have the highest corporate tax rate? It is reasons like these that the country consistently sides with Republicans on economic issues. Even in an economic downturn, according to an Opinion Dynamics poll, 57 percent of Americans think Bush is doing a better or the same job as Clinton would be doing, and please take into consideration Clinton is associated with the “booming ’90s.” The reason lies in the fact that a political party that generally supports a higher tax burden on both individuals and businesses will find it a little harder to be seen as “pro-stimulus” party. The two are mildly incompatible, and the American public generally realizes that.
While high taxes and high spending are generally liberal policies, the governor is by no means the only one at fault. The Iowa Legislature shares the blame. We need to talk to our representatives and let them know our concerns. Community enrichment is a positive goal, but it doesn’t need to be funded to the tune of hundreds of millions of dollars during an economic downturn.
By far the easiest and quite possibly the most successful way of inciting economic development is to decrease the tax burden on the entities that create jobs and prosperity. While it is easy to fear “big scary corporate America,” and some want you to, it is hard to ignore the benefits of business when they set up shop in your neighborhood, pumping millions of dollars into the economy, and in turn, your pocket. Our government needs to make a deliberate move to encourage growth in Iowa. I’m not speaking of aquatic centers, I’m speaking of jobs.
The governor talks about energizing the state’s economy, but unless graduates want to work in Vilsack’s proposed biotechnology industry, Mom can postmark my Christmas card to Chicago.
Nathan Borst is a senior in political science from Ames.