IowaPolitics.com BlogWatch

When legislators in Iowa unveil a new property tax "reduction" plan,
they usually intend to spend more money from the state's budget to buy
down local property taxes. In other words, they intend to take money
collected from taxpayers in the form of income and sales taxes -- and
put it toward property taxes. There is no net tax reduction under
these plans -- the taxpayer's money just goes somewhere different. One
state legislator with whom I served was fond of remarking that she
"couldn't afford any more property tax relief." We've got the same
deal at the federal level with the repeated attempts to stimulate the
economy. Larry Kudlow reports that President Obama's latest proposal
will cost $135,000 a job. In total, the spending and regulation
accompanying many Obama policies are costing jobs rather than allowing
for robust growth.

Labels: taxes

On Monday, the Iowa Legislature will convene for the 2010 Legislative
Session, and Iowans across the state will hold their breath, waiting
to see if Governor Culver and Legislators will increase taxes. Iowans
are all painfully aware the state budget is in terrible shape with a
billion-dollar spending gap. In October, the Governor issued a
simplistic ten percent across the board budget cut, subjecting Iowans
to property tax increases, reductions in services, and a bigger budget
disaster for next year. The state budget cannot be fixed by short-term
reactionary measures; I chose to suggest state budget savings measures
to Governor Culver and the Legislature, with the following criteria
for each recommendation: Cumulatively reduce state spending by 10%.
Hold K-12 education funding harmless. Hold public safety funding
harmless. No mass layoffs. No property tax or any other tax increases.

Labels: taxes

The House of Representatives approved the Tax Extenders Act of 2009 on
Wednesday by a vote of 241 to 181. As you can see from the roll call,
all but ten Democrats voted for the bill, including Iowa's Bruce
Braley, Dave Loebsack and Leonard Boswell. All but two Republicans
voted against it, including Iowa's Tom Latham and Steve King. After
the jump I've posted more details about the business tax credits that
would be extended if this bill becomes law. On December 3, the House
passed the Permanent Estate Tax Relief for Families Farmers and Small
Businesses Act, which caps the estate tax at 45 percent and exempts
estates worth up to $3.5 million (preserving this tax at 2009 levels).
Again, all of Iowa's Democrats voted for the bill. Iowa's Republicans
voted against it. If Congress had not acted, the estate tax would have
been repealed in 2010 and then would have reverted to its 2001 level
in 2011 (a 55 percent tax on estates valued above $1 million).

Labels: taxes

Iowa taxpayers, along with local and state governments, are facing the
perfect storm of lack of business development, an escalating tax
burden, and a school funding crisis brought on by years of neglect and
bad fiscal discipline in Terrace Hill. Where do those three storm
clouds intersect? Property taxes, property taxes, property taxes.
Storm Cloud #1 – Obstacle to Business Development. Iowa's commercial
property tax burden is the third highest in the country. Those in the
industrial classification are in the top ten. Residential owners are
in the top fifteen. If you take the time to talk to business owners,
big or small, they'll tell you that property taxes are the key
obstacle to expansion. Ask a developer or builder, and they'll tell
you that Iowa's property taxes per square foot of built out space make
it uncompetitive to build and lease property compared to other states.

Labels: Christopher Rants, taxes

By Gubernatorial Candidate Christian Fong ... Iowa is facing serious challenges. We no longer have a government that reflects the core values that most Iowans share. We are a state where hard work and education no longer pay off the way they should. Now, the state is routinely waking up to headlines of mass layoffs in our cities and towns. The numbers are staggering. One hundred and fourteen thousand unemployed Iowans. Poverty rates that have risen, under Democratic leadership, fourth fastest in the nation this decade. Chronic underpay, with most Iowans making 10-15% less for equivalent jobs than around the region. And the higher the education rate, the bigger the pay gap! This impacts people's ability to turn hard work and education into the Iowa Dream.

Labels: Christian_Fong, taxes

"If you build it, He will come." The Iowa Legislature, in a
bi-partisan fashion in 2007 and in 2009, passed film tax incentives to
surpass what other states were offering to lure Hollywood into Iowa.
Well, the film industry has arrived in Iowa - and it is big business
for the state - bringing in film crews, movie stars and the best of
Iowa jobs and opportunities. But wait ... like every good Hollywood
movie, there is a plot twist ahead. Dozens of film advocates and
Iowans are now worried that a law change passed by Iowa Democrats
capping the tax credits in the closing days of the 2009 session will
effectively kill the tax breaks and this new Iowa industry.

Labels: taxes

The Democrats eliminated major tax deductions and exemptions for Iowa
flood and tornado victims in the 2009 legislative session. They also
did away with the teachers tax deduction, college tuition assistance
tax deduction, and the business depreciation tax deduction. These
deductions put over $56 million back into the State General Fund. The
elimination of these deductions were never communicated to Iowa
citizens or their accountants. The Democrats eliminated these
deductions that have been available for years. The Democrats made the
tax increases retroactive to the 2008 tax filings that were due April
15th. Iowans had no idea this tax increase was going to occur when
they filed their 2008 return. Now the Department of Revenue has
thousands of wrong tax returns and they are demanding payback for this
tax money.

Labels: taxes

U.S. Sen. Tom Harkin said this morning that the idea of using a tax on
sodas/junk food to help pay for health care reform is generating some
fizz in Capitol Hill. "It's on the table. It could be," Harkin said
during his weekly conference call with print scribes. "And quite
frankly, I'm pre-disposed (to it). "That's what's making people
unhealthy and obese," he said. Harkin rejected the notion that a
government tax on food choices could play into the hands of critics
trying to shoot down the broader health overhaul. Actually, Harkin
said, all the tax would do is help us listen to our "DNA." Harkin says
we're all wired genetically to be healthy, but our sugar-coated
society steers us to make bad choices.

Labels: taxes, Tom_Harkin

The LOST referendum is still up in the air and both sides are
claiming victory, but saying "no" to defeat. In Iowa City and
Coralville, there are votes to recount -- with paltry 7 and 8 vote
margins between the 1 cent 4 year sales tax. The county reported that
the turnout of registered voters was around 15% for Iowa City and just
over 17% in Coralville. Regardless of how it all turns out, Iowa City
and Coralville voters lost and non-voters won. Non-voters did not take
time out of their day to vote, I mean it took 3 or 4 minutes at the
highly congested precinct 17 where I was one of three people voting at
7:45 in the morning. Non-voters won because they did not expend fuel
in cars, on bikes, or on foot to make their voices heard on an issue
that one group said would be a 17% hike in their sales taxes.

Labels: taxes

In the midst of recession, right after income tax season, and in the
wake of controversial city council actions (buh-bye Mike Lombardo),
the most anti-sales tax city in the state recognized the flood relief
need and battled to a de facto tie: a six vote win in Iowa City and a
seven vote loss in Coralville. Expect those results to hold. The
chance that outstanding absentee ballots will flip things is slim in
Iowa City and only theoretical in Coralville and Shueyville. Only
three came in on Wednesday (all Iowa City), and those numbers diminish
day by day. Almost all of the unreturned ballots were sent out under
the The Uniformed and Overseas Citizens Absentee Voting Act.

Labels: taxes

Johnson County has been hit hard by Mother Nature in recent years and
make no mistake it will happen again. Remember the flood of 1993? It
caused millions of dollars in damage. In knee-jerk reaction, millions
of taxpayer dollars in flood mitigation projects for the area were
spent. That worked out well didn't it? Not thinking things through and
getting it right cost us. So now as a result of the 2008 flood and
under the guise of "solving Mother Nature," local government is
hurriedly trying to slap you with a Mother Nature tax. I've heard
Coralville city councilors like Tom Gill tell us that they want to
move forward with flood mitigation projects with arrogant lines like,
"It has been decided to solve the problem once and for all."

Labels: taxes

Once again the people of Iowa have won a minor victory against the
Democrats controlling the state government. The debate on the highly
volatile issue of federal deductibility was scheduled to take place
this morning. However, after opponents of the legislation swarmed the
state house Democrats felt the dire need to postpone the debate once
again. Public opposition to House File 807 has grown tremendously over
the last several weeks. Part of this opposition must be credited to
Iowa's For Tax Relief President Ed Failor, Jr. due to his
organization efforts. He turned a massive surge of public disapproval
into a grassroots movement Iowa has rarely seen. As a result of this
organization Statehouse Democrats are feeling the heat of the
disappointed public.

Labels: taxes

Over this past weekend, we were told that Democrats in the legislature
and Governor Culver had come to an agreement of the repeal of federal
deductibility. It's now mid-week and legislative Republicans know very
little about the plan, and the people of Iowa are totally in the dark.
We are told that the compromise plan would lower all tax rates or
increase the standard deduction for every taxpayer. What has me
concerned is that when the Democrats rolled out their original
proposal they claimed that it was revenue neutral and taxpayers in the
lowest tax brackets would receive a tax cut. The media took the
Democrats at their words and proclaimed the bill as revenue neutral.
They were wrong.

Labels: taxes

Most of you are already aware of the proposed one-cent sales tax
increase in Johnson County which will be voted upon in a special
election May 5. The implied need for this tax is to generate revenue
(approximately $72.8 million over a four year period) for various flood
projects in Coralville and Iowa City. Iowa City and Coralville are
two of the (11) municipalities which comprise Johnson County. The
psychology behind the support of this tax is intriguing. First, it
addresses compassion for those unjustly inflicted by the flood.
Secondly, it imparts our duty as citizens of Johnson County to assist
our neighbors in need. While I believe no one in our county is
unsympathetic to such needs, to sell the need for a one-cent tax is
questionable.

Labels: taxes

All through the weekend, the only political item people talked about was gay marriage. No federal deductibility, no talk of the economy, just gay marriage. For those of you who actually believe elections can be won solely by talking about fiscal issues, the furor over this issue proves you couldn't be more wrong. Do fiscal issues matter to folks? Absolutely. But you can't win an election without talking about social issues. The year 2010 will be here before you know it. We will be talking about gay marriage and other social issues for one reason and one reason only - liberals have gone way too far, way too fast.

Labels: Iowa GOP, marriage, taxes

Rep. Paul Bell, D-Newton, has joined four of his fellow House
Democrats in publically stating he will oppose a bill to eliminate
federal deductibility. House File 807, which would end Iowans' ability
to subtract federal taxes from their income when figuring their state
taxes, was intended to make a fairer tax structure for Iowa and lower
the tax brackets to make the state more attractive to businesses and
families, Bell said. "Unfortunately, it is nearly impossible to adjust
the tax brackets without adversely affecting many of the people of
Iowa," he said. "I do not feel enough time has been devoted to
studying the ramifications of the bill. Thus, I will not be supporting
HF 807."

Labels: taxes

Democrat leaders in the House are having difficulty finding the 51
votes required to pass the repeal of federal deductibility. House
Democrats originally planned to debate and vote on HF 807 tomorrow,
but the federal deductibility bill has been removed from the calendar
for the time being. As it stands now, the following Democrats are
opposed to the bill: Rep. Geri Huser - Altoona, Rep. Doris Kelley -
Waterloo, Rep. Brian Quirk - New Hampton, Rep. Dolores Mertz -
Ottosen, Rep. Elesha Gayman - Davenport, Rep. Paul Bell - Newton.
Democrats are working on an amendment aimed to get one or two of the
Representatives listed above to flake.

Labels: state House, taxes

Just an hour into the public hearing on House File 807, Speaker of the
House Pat Murphy ordered State Troopers to remove all citizens who
were not scheduled to speak from the House chamber. Murphy's decision
came after Rep. Paul Shomshor warned the people who gathered that if
they continued their outbursts, the galleries would be cleared.
Speaker Murphy's decision to remove the people who had taken the time
to speak out or listen to this debate was shocking and something never
seen before. While the crowd at times was rambunctious, it also
quieted down quickly for the next speaker. Instead of evicting
hundreds of concerned taxpayers from the State Capitol, Murphy and
Shomshor should have simply kept warning the audience about their
behavior and continued with the forum.

Labels: Pat_Murphy, state House, taxes

I was there, it was cool. When provoked by public opposition to the
Labor/Socialist/Democrat confiscatory plan to repeal federal
deductibility at tonight's public hearing, Democrat Speaker Pat Murphy
gave a vivid exposition of Cromwellian politics at their worst. Rumors
of the jack booted tactics that Murphy and Majority Leader Kevin
"Bully" McCarthy employ behind closed doors in running the House have
been rampant, but tonight the world was treated to a public explosion
by Murphy. Yes, as you've heard, Murphy cleared the public from the
people's house because the 600 or so people who showed up to oppose
the Labor/Socialist/Democrat confiscation scheme politely clapped for
opposition speakers (who outnumbered the L/S/D confiscation proponents
8-1 or so) and less politely but quite discreetly and softly booed
proponents of the plan.

Labels: Pat_Murphy, state House, taxes

Republicans are responding to the effort to restructure Iowa's income
tax system to help working families and eliminate federal
deductibility in typical fashion: with a simplistic slogan ("Tax on a
tax") and a screaming performance at a conservative-packed legislative
hearing Tuesday night. But once you actually LOOK at the proposals,
you see why the Republican puppet masters are so upset. The Iowa
Policy Project notes (.pdf): "Federal deductibility overwhelmingly
benefits higher income taxpayers, since most low-income taxpayers
don't pay any federal taxes. A 2003 analysis of Iowa's income tax
system found that 80 percent of the benefits from federal
deductibility went to the wealthiest 20 percent of Iowa taxpayers." My
own anecdotal example: The federal refund goes to cover what I owe the
state.

Labels: taxes

Last week the Democrats controlling the state legislature outlined
their proposal to eliminate one of the most widely used tax
deductions, the federal deductibility. This bill is known as House
Study Bill 284. There is plenty of opposition to this bill. And at the
same time there is support for the bill. No matter which side of the
issue you fall on make sure that you attend the public hearing being
held at the capital building tomorrow evening (Tuesday March 31, 2009)
at 7:30 PM in the evening. As I stated, regardless of which side of
the issue you are on, please be sure to attend this hearing to let
your voice be heard.

Labels: Legislature, taxes

... All I know is that if the Legislature is going to take away a deduction, they ought to add some back in. It's only fair. I have 5 ideas. 1. Drinkability Deductibility - This break would recognize the economic and environmental benefits created by Iowans, like myself, who buy beer by the keg - which save aluminum and glass, are reusable and slice fossil fuel demand by requiring fewer beer runs. And what was I doing when I came up with this concept? I'd rather not say. 2. Gullibility Deductibility - Iowans should get to deduct the cost of any product they buy late at night - Snuggies, Shamwow, Loud 'N Clear etc., or the loss of any unused gold jewelery they put in a durable envelop and sent to strangers far away. ... 5. Twitterability Deductibility - A 0.0001-cent tax cut for every Tweet. That ought to deal the final death blow to the last remaining remnants of your internal dialogue.

Labels: taxes

Is this the beginning of the end for many small business owners? Iowa
Democrats have proposed the elimination of federal deductibility on
Iowa income taxes. Making matters worse, while in the midst of severe
economic conditions that directly resulted from two years of fiscal
irresponsibility and massive spending increases in our state's budget.
If you're not a small business owner as I am... Let me walk you through
a couple principles that truly govern the success or failure of Iowa's
economy. 1) In business, it's all about percentages. I know of
several business owners who are perceived to be "millionaires" by
many, who in fact are simply living on the 5% margin that remains
after capital expenses, supplies, payroll and taxes.

Labels: taxes

To feed their insatiable appetite for spending and increased government, Democrats today rolled out their plan to eliminate Iowans' largest tax deduction, federal deductibility. "At a time when Republicans are standing for truth and transparency, liberals are trying to trick Iowans into believing they're going to get a tax cut," said House Republican Leader Kraig Paulsen (R-Hiawatha). "In reality, this is a major tax increase." Because of the Democrats' plan, beginning in 2010 when the federal tax cuts expire, middle class Iowans see will more than a $100 jump in their state tax bills.

Labels: Kraig_Paulsen, taxes

Senate Democratic Leadership is making a bold move by recently
announcing that they will attempt to eliminate federal deductibility.
The message signals that Iowans should brace themselves for a tax
increase. Based on the most recent information, eliminating federal
deductibility would be a tax increase of $594 million. An Iowa
household earning $45,000 would receive an average of a 5% increase in
their taxes or $222. Iowa is one of a handful of states that allows a
100% deduction for federal income tax payments on the state individual
tax return. It protects Iowans from paying a state income tax on money
used to pay their federal income tax.

Labels: state Senate, taxes

Just a little over two weeks ago, Governor Chet Culver told Iowans he
would VETO any form of a gas tax increase if it hit his desk. In
making his statement Culver told Iowans he refuses to increase taxes
during a severe economic recession. Now Culver and the Democrats are
on the verge of passing a $600 million tax increase by eliminating
federal deductibility. But what about not raising taxed during a
"severe economic recession" Governor? Since the stock market is
inching closer to the 8000 mark, does that mean now is the time to
raise taxes?

Labels: Chet_Culver, taxes

The April 15 federal tax filing deadline is approaching, so you'll be
hearing more from Iowa 5th District Congressman Steve King on his
efforts to abolish the federal income tax. For the seven years he's
been a congressman, King has flogged a national consumption/sales tax
called the Fair Tax as a replacement for income tax. In fact, if you
turn to C-SPAN right now, you'll see King touting the Fair Tax. King
at 6 p.m. began using the special order speech time after the House
shuts down for the day to deliver his case (to an empty room, yes, but
also for the cameras) for the tax conversion. He'll say the Fair Tax
is true economic stimulus, in contrast to the initiatives of President
Obama.

Labels: Steve_King, taxes

Rural people use more energy. So when limits are placed on carbon
emissions, will there be a redistribution of money from the center of
the country to the urban coasts? ... Bruce Bailey says the farmers and
other rural residents who buy power from his relatively small
electrical cooperative in Iowa could be in for a big surprise if
President Barack Obama's cap-and-trade plan to reduce greenhouse gas
emissions becomes the law of the land. In fact, Bailey, who heads the
Glidden Rural Electric Cooperative, and other REC sources say that the
nation’s countryside, and reaches of America more dependent on coal,
could be disproportionately affected by the environmentally minded
emissions program contained in the Obama budget plan now before
Congress.

Labels: agriculture, taxes

Hard times have made Iowans nervous about the future. The problem is
simple -- for years, our state has spent more than it has taken in on an
ongoing basis. Our elected officials were able to do this by playing
shell games with funds and accounts designed for other purposes. Now,
with those funds drying up, coupled with an economic downturn and last
year's flood damage, Iowa faces a perfect fiscal storm -- the likes of
which we have not seen in a long time. The solution to this problem is
obvious -- bring expenditures back in line with revenues. Since our
elected officials have the ability to adjust both sides of the
equation -- spending and revenues -- they must cut spending, raise
taxes, or a combination thereof.

Labels: David_Vaudt, taxes

Republicans in the Iowa Legislature are calling a proposed tax
increase on propane a "backyard barbecue" tax. "This General Assembly
just keeps finding more ways to take money out of people's pockets,"
said Rep. Christopher Rants, R-Sioux City. He opposed the measure,
which was approved by the House Commerce Committee Thursday. The
proposal -- which would double the levy on a gallon of propane to
two-tenths of a cent -- would pay for energy efficiency efforts.
Democrats took the ribbing in stride. "A fire burns in my heart to tax
barbecues," joked Rep. McKinley Bailey, a Webster City Democrat who
supported the measure.

Labels: Christopher Rants, taxes

Allowing a proposed increase to the state's fuel tax to come to the
floor of either chamber of the legislature would be a huge mistake,
Gov. Chet Culver said Monday. Culver said the money Iowa would receive
from the recently passed federal stimulus bill, estimated at about
$358 million, makes a gas tax increase an even worse idea. "So I think
[legislators are] going to have a very tough time making the case to
average Iowans that, given the recession and given the fact that we
just received $358 million for road projects, that we need to raise
the gas tax right now," he said.

Labels: Chet_Culver, taxes, transportation

So you all know I absolutely hate the idea of raising the Gas Tax
during these difficult economic times. That's not to say that I don't
believe in investing in our roads and infrastructure. If you listen to
any of the legislators who support the gas tax increase you would
think that Iowa hasn't done anything to recently to help fund road
improvements, which simply isn't true. Last year the legislation was
passed and signed into law that increased vehicle registration fees
substantially in our state. The increase in registration fees was one
of the recommendations from the Time-21 study. The problem the
legislators are having is that money isn't rolling in fast enough.

Labels: taxes, transportation

If you want to see my blood boil, just send me some a news story or
show me a clip from Iowa Press of a Republican in the state
legislature agreeing to raise the gas tax if their Democrat
counterparts decide to act on the issue. While I agree that one of the
purposes of state government is to invest public infrastructure, state
government also must realize that raising taxes or fees during the
current economic crisis is risky, especially when you realize that the
state raised motor vehicle fees just last year to help pay for our
infrastructure needs. I love to hear how some legislators think an
eight to ten cent increase per gallon is really no big deal. Some
suggest that it would only cost Iowa's another $50 bucks a year give
or take.

Labels: gas_prices, taxes

Well, I spent the entire day at the Iowa Capitol lobbying for the
right of Linn County voters to decide whether or not they want to tax
themselves an extra penny on local sales, presumably to be used for
flood relief. Yesterday, the Iowa Senate passed an expedited calendar
to set a Local Option Sales Tax (LOST) vote in any Presidentially
Declared Disaster County for March 3rd. The tax would be collected
starting April 1st. The reason March 3rd is needed, is due to the fact
that local governments certify their budgets on March 15. If the
revenue is not there to provide services, the likely outcome would be
cuts in services and a significant property tax hike on residents.
That is why I was so dismayed to see Republicans, en masse, vote
against this measure and all but ensure a major property tax hike if
they had their way.

Labels: Iowa GOP, taxes

Odd -- Iowans for Tax Relief scheduling a press conference in Des
Moines at the same time of former legislator Mary Lundby's funeral in
Cedar Rapids. Look, I know the world doesn't need to stop because of
her funeral but it's also good to show some respect whether you were a
fan of hers or not. Senator Gronstal and Speaker Murphy both showed
some class by canceling most of the committee meetings so people could
attend the services. So what was the big deal, ITR is following up on
President's Obama's pledge to provide more transparency in government.
They introduced the Iowa Taxpayer Transparency Act of 2009, basically
calling on the state to spend $40k on a website that would allow
people to see where their tax dollars are being spent.

Labels: Mary_Lundby, taxes

"The federal government is bloated, inefficient and spends too much of
your hard-earned money. Not coincidentally, the federal government is
also the largest employer in America. Now President-elect Barack Obama
and House Speaker Nancy Pelosi want more taxpayer dollars to pay for
additional, unneeded government workers." ... I needed some good news
today and Rep. Steve King provided it for me. King sees what the
Democrats want to do with additional taxing of Americans and
increasing the numbers of government workers. It is time for us to
give Rep. King and others our support for their efforts to change the
tax system. It won't be easy but our current way of tax, spend, and
tax some more is not working. King will find support with promoting
the Fair Tax from Mike Huckabee and others.

Labels: Mike_Huckabee, Steve_King, taxes

Yesterday I wrote a little about our state's budget problems and how
Chet is going to cut or freeze new spending. The Des Moines Register
actually has a decent article on this today. Culver did take the easy
way out. Rather than slashing programs that don't work or are
inefficient, Culver chose to dance around the edges with cuts in the
publican universities, out-of-state travel, freezing most hiring and
delaying a $37 million new state building. State Auditor Vaudt warned
the legislature and governor last year about the future budget
shortfalls. Of course politicians can't seem to understand a budget.
How are these guys not homeless? They spend and spend our taxpayer
dollars like there is no limit but at home they are fiscally
conservative?

Labels: Chet_Culver, David_Vaudt, taxes

Speaking Friday in Carroll, U.S. Rep. Steve King, R-Iowa, said he
might propose implementing a national sales tax in place of the
current income-based system should America's economic woes stretch
into next year, according to the Carroll Daily Times Herald's Butch
Heman. King also said that Congress might need to hold a special
session if the economy's downward spiral continues at its current pace
through the next few months. "If you're seeing red numbers on the Dow
and it's spiraling downward, something's got to happen to arrest it,"
King said.

Labels: Steve_King, taxes

The stock market is predicated by the idea that, for most of us, good
investments come from patiently riding out waves of the market and, of
course, buying stock at low prices and selling it when the price is
high. This is a voluntary activity, though, in fairness, more and more
employment retirement programs are being tied to it. Paying taxes, on
the other hand, is not a voluntary activity. In fairness, we get a lot
of good stuff from our taxes: schools, medical research, streets and
highways, mass transit, and, oh, a social safety net, to name a few.
However, it also pays for weapons of mass destruction, bailing out
corporations, rewarding the richest of us, and more. The say we have
in this is limited to voting for (and cajoling thereafter) candidates
who best represent our views. Note that investing in the stock market
is participating in a lightly (apparently) regulated free market,
while paying taxes is a result of representative democracy.

Labels: taxes

I am sorry to do this. I was really wanting to stay away from politics
until after the floodwaters had completely receded from Iowa. However
the words of Iowa Senate Minority leader Mike Gronstal has changed all
that. In comments that Senator Gronstal made recently in regards to
the recovery efforts from the Flood of 2008, he said that the state
should not rule out as an option, taking out loans to pay for the
recovery efforts. Hasn't those that wield the power in our government
learned that you have to pay your debts eventually. Doesn't he realize
that if the state of Iowa were to go into debt today to pay for our
recovery efforts then it would be our children that would end up
having to pay for it. It is obvious to me that tax and spend Mike has
absolutely no fiscal responsibility, at least when someone else's
money is at stake.

Labels: Mike Gronstal, taxes

Radio Iowa did a great piece yesterday on University of Iowa Professor
Peter Fisher, who did a great job summarizing the pitfalls of Tax
Increment Financing (TIF). In the article, Fisher brings up an
excellent point - If you want to build a school, you must put it to a
vote and get 60% of voters to support funding the project. Fisher
notes that "As soon as [something] becomes a TIF project, that voting
requirement disappears. It's automatically exempt from a voter
referendum." He's right. To create a TIF district, all it generally
takes is a majority vote of a City Council to pass. Fisher also makes
a good point about giving tax breaks to struggling shopping malls
trying to keep up with newer competitors. ... Why subsidize something
that is failing? If the general public won't support it, why should a
city try to prop it up?

Labels: taxes

Some issues don't break down on party lines. A release by Joel
Dykstra, a Canton Republican who wants to join the U.S. Senate in
January 2009, serves as a good reminder. Dykstra lays out his
opposition to the idea of a federal gas tax holiday from Memorial Day
to Labor Day, an idea floated by Republican presumptive presidential
nominee John McCain and others. It's geared to the major vacation
driving season, and taking away the 18.4 cent federal gas tax would
offer relief at the pump, goes the theory. Unleaded gas just rose by a
dime to $3.52 at most Sioux City stations two days ago. But Dykstra
says the tax holiday would do more harm than good. He contends there's
"no guarantee that a reduction in the tax would benefit consumers."

Labels: taxes

From the Des Moines Register: "Iowa will hike its sales tax by 1 cent
per dollar, replacing local-option sales taxes that each of Iowa's 99
counties collect for school infrastructure, under a bill signed into
law today by Gov. Chet Culver. For most Iowans, there will be no
out-of-pocket difference because one tax is simply replacing another
that they pay already. But the important difference between the tax is
one of financial fairness, advocates of the proposal have said." The
Iowa Legislature and Governor Chet Culver basically said "Screw The
Taxpayers" and took away the option of eliminating the tax in their
area if they felt the local school district was spending the money the
wrong way.

Labels: education, taxes

State Auditor Dave Vaudt released a report today revealing yet another
way that Iowa Taxpayers have gotten the shaft from our state
government. Our esteemed leaders have paid A.T. Kearney, a consulting
firm roughly $4.5 million dollars over the past two years. Their task
was to find cost savings in the state budget. The justification for
this $4.5 Million expense: Find $10.6 Million in savings. But that's
just where the lunacy started. Not only did they fail to give us value
for our $4.5 Million, they found only $3 Million in savings. We lost
$2 Million on the deal. Nice.

Labels: taxes

No New Courthouse for Polk Co. ... A ballot measure that would have
raised property taxes in Polk County to get the $132 million needed
for a new Polk County Courthouse (and renovations to the old one)
failed by a wide margin yesterday. In order to be approved, the
measure needed to pass with 60% of the vote. Instead, it failed, with
the "no" votes taking 57%. I had mixed feelings about this. Tax
increases suck, but I can see the need for more space, and the idea of
keeping the criminal stuff separate also appeals to me. There's
nothing like going to pay a traffic ticket and having a guy in a
striped jumpsuit and cuffs sit next to you while you wait to be
helped.

Labels: Legislature, taxes

Newspapers across the state blared the above headline Thursday
morning, as taxes will again be raised in Iowa. That's right -- over
$400 million in total tax increases, and counting, so far. The latest
measure would eliminate the local option sales tax for schools, and
replace it with a statewide penny sales tax that, for now, is devoted
to schools. Two aspects of this bill are troubling. As we have seen
time and time and time again, all too often when the governor and
Legislature get their hands on funding, it gets "scooped" for other
pet projects, especially in times of economic slowdown. Second, this
tax increase now raises the state's use tax as well. The use tax is
applied when businesses purchase goods from out of the state to use
here in Iowa.

Labels: taxes

Today, Governor Culver bravely endorsed higher gas taxes. Apparently
the steady escalation of gasoline and diesel prices have finally
produced what we free market advocates always knew it would, reduced
consumption of gasoline and diesel. That's what conservatives call
conservation-less consumption without any government action at all,
how existential to be sure. It seems that three bucks a gallon
triggered Iowans collective gag reflex and we are actually driving
fewer miles. One consequence of conservation is a reduction of fuel
tax revenue. It, of course, makes sense; as we purchase fewer gallons
of gas the State's per gallon based tax revenue diminishes in a linear
relationship to the decline in gallons purchased.

Labels: Chet_Culver, taxes

The issue of increasing gas taxes to pay for highway improvements is
being weighed in Siouxland this year. The Nebraska Unicameral passed a
bill to raise the gas tax by a penny, but yesterday Gov. Dave Heineman
vetoed it. He said "now is not the time to raise the gas tax," since
"gasoline and diesel prices are hitting record highs almost every
week, the cost of food is increasing and health care costs are
soaring." Meanwhile, a gas tax increase of a few cents per gallon is
under consideration by Iowa legislators. A one-cent increase would
direct $22 million to the highway coffers, two cents would bring in
$44 million annually, etc. Iowa Farm Bureau, which has considerable
clout in Iowa, is backing a gas increase of a few pennies.

Labels: taxes

The Press-Citizen has a regular Sunday editorial page column called
"Our Quick Take on Last Week's News Stories." Editorial, "Our View --
Our quick take on last week's news stories," Iowa City Press-Citizen,
January 27, 2008, p. A9. But its Saturday issue contained so many
stories that relate to topics followed by this blog that I've decided
we can have an "Our Quick Take on This Weekend's Stories." The folly
of corporate subsidies vs. the sure path to economic development. We
often comment about the folly of injecting taxpayers' money (in the
form of tax breaks, TIFs, infrastructure development, and outright
bribery) onto the bottom line of for-profit businesses...

Labels: taxes

If you are already making plans for the federal tax rebate, you might
want to consider that the state of Iowa could have its hand out to
take a chunk. The federal rebates would still be subject to Iowa's
income tax unless state lawmakers and Gov. Chet Culver decide to
exempt them. That's what lawmakers did the last time federal tax
rebates were issued in 2001. Renee Mulvey, spokeswoman for the Iowa
Department of Revenue, said the tax rate would vary depending on
several factors, with a top rate of 8.98 percent. Iowa House Minority
Leader Christopher Rants, R-Sioux City, said Republicans are drafting
legislation to ensure Iowans won't end up paying a state tax on their
rebates.

Labels: Chet_Culver, Christopher Rants, taxes

Democrats in Iowa this week continue to promise your tax money to
others. In just the last 48 hours Chris Dodd has said that he will
spend at least another $48 billion for Veteran's Benefits. Hey, at
least the people getting this benefit actually contributed something
to the larger nation for which they should be rewarded. Moreover, Dodd
is also talking about a defined group rather than a social entitlement
for everyone. Barack Obama promises far greater federal generosity.
Obama has offered plans to convert the Family Medical Leave Act into a
welfare entitlement, with paid leave instead of unpaid leave.

Labels: Barack_Obama, Chris_Dodd, taxes

Peanuts comic character Linus probably would be upset, and Iowa House
Minority Leader Christopher Rants definitely is. As newspaper stories
on a new tax on pumpkins in Iowa are published today on Halloween,
Sioux City Republican Rants is slamming the tax as another example of
runaway confiscation of incomes by Democrats. Or, more precisely in
his words, Democrats should "stop taxing fun." The Iowa Department of
Revenue is taxing pumpkins after a new policy determined pumpkins are
used primarily for Halloween decorations and not food, and thus should
be taxed at the 6 percent state rate. Previously, pumpkins were
considered an edible squash and exempt from taxation. The move has
pumpkin owners bemoaning a bite into their fall pumpkin sale profits
and Rants raging.

Labels: Christopher Rants, taxes

Iowans for Tax Relief recently announced that it was backing a primary
candidate against incumbent Republican Clarence Hoffman in the
Republican primary in State House District 55 (Ida County and parts of
Crawford, Monona and Woodbury County). Hoffman is a fifth term
Representative who crossed party lines to support the bill banning
discrimination based on sexual orientation. This is the second time
Iowans for Tax Relief has backed a primary candidate against an
incumbent Republican so far for the 2008 cycle. The first State
Representative that they tried to primary, Walt Tomenga in House
District 69 (Johnston and Grimes) has since announced his retirement.

Labels: taxes

You have to hand it to our local chamber of commerce. The Greater Des
Moines Partnership, with the backing of the biggest companies in town
and a $770,000 war chest - 200 times that of the opposition - managed
to convince about one voter in seven to vote for a sales tax increase
in an off-season election specifically timed to maximize their chances
for approval. It's hard to think of a way to make their performance
any more disastrous, short of having mobs chanting "no!" sack their
headquarters building. What a debacle. Only Kim Jong-Il and Fidel
Castro win by greater margins than "No." In some cultures, a loss like
that would lead to abject apologies by the Partnership board, perhaps
followed by ritual suicides. After such a resounding vote of no
confidence, a parliamentary government would resign and appoint a
caretaker government pending new elections. That would also be
appropriate for the leadership of the Partnership after such a waste
of member and taxpayer dollars.

Labels: taxes

Desmoinesdem has previously written about Project Destiny -- a
tri-county joint venture between Polk, Dallas, and Warren Counties to
increase the sales tax in the three communities by one cent--and urged
you to vote against the plan. And now the South Central Iowa
Federation of Labor AFL-CIO, will announce on Thursday that they plan
to oppose the sales tax increase as well. From an advisory put out
today: "Union leaders say voters should consider that "basic needs"
are not being met in the three-county area. A regressive tax to
finance so-called "quality of life" efforts such as bicycle trails,
they say, should not take precedence over citizens' fundamental
needs." With strong labor opposition, who knows how the effort will
fare on Election Day, July 10th. Discussing and talking about the
proposal is no easy subject. Almost two weeks ago, CityView's cover
story was dedicated to the debate over Project Destiny. The story
offered more insight on the project, its supporters and opponents than
the Register or any other local news stations have offered. I
recommend reading the full story to truly understand the debate behind
Project Destiny.

Labels: taxes

Tom Tancredo is now calling on Iowans for Tax Relief and the Iowa
Christian Alliance to reconsider and invite Ron Paul to Saturday's
debate. Maybe he thinks this wins some points from the Paul People,
but I doubt it. I would think the libertarian position on immigration
would be open the borders and let employers hire who they want -- the
diametric opposite of Tancredo's "stop legal immigration" view. Paul,
meanwhile, has taken up the cause of two New Hampshire tax protesters:
'Paul expressed his sympathy for Ed and Elaine Brown, who have been
holed up in their hilltop home for several months, threatening
violence if marshals come to arrest them. The Browns have each been
sentenced to 63 months in prison for crimes related to their refusal
to pay federal income taxes for nearly 10 years. The Browns contend
that there is no law compelling Americans to pay income taxes.' On
which count they are so so wrong, says attorney Daniel Evans in an
exhaustive tax protester FAQ. In the Concord (NH) Monitor: "People who
point this out and fight the tax code and fight the monetary code are
heroic," Paul said in a video that's been linked to several pro-Brown
websites.

Labels: Ron Paul, taxes, Tom_Tancredo

Those of you who live in Polk, Dallas or Warren counties will get a
chance to vote on the "Destiny" tax proposal on July 10. David Elbert
describes the basics in this piece in the Sunday Register. The concept
is, the sales tax would go up from 6 percent to 7 percent in the three
counties. One-third of the revenues would go to "property tax relief,"
one-third to fund cultural attractions like bike trails, and one-third
to local governments to use on whatever they want. The Register
coverage has been mostly cheerleader pieces on how great an idea this
is, and how "Yes to Destiny" would help fund the things that make Des
Moines a great place to live. They've been mostly dismissive of
opposition as based on knee-jerk anti-tax sentiment, or on mistrust of
local governments because of things like the CIETC scandal. As much as
I hate to find myself in agreement with the Grover Norquist wing of
the Republican Party, I strongly oppose this tax proposal.

Labels: taxes

If they have a confessional at the Iowa Department of Revenue, this would be a good time to remodel it. Nobody will be using it for the next 13 weeks or so. Governor Culver has signed the tax amnesty bill, SF 580. The bill forgives penalties and 1/2 of the interest during the amnesty period, which runs from September 4 thorugh October 31 of this year. The Governor's website touts this as a "one-time" amnesty. Yes, one time, just like the last one in 1986. The Tax Policy Blog has a post on the policy implications of tax amnesties: "What we wrote in 1985 holds true today: if lawmakers decide to implement tax amnesty programs, they should be accompanied by fundamental tax reform that makes the tax code simpler and easier to comply with." Iowa has gone in the opposite direction, adding more loopholes targeted tax incentives to its tax law while doing nothing to lower rates or broaden the tax base.

Labels: Chet_Culver, taxes

As the Iowa General Assembly brings this year's session to a close (presumably in the next week or two), we are likely to see the creation of an Iowa Power Fund that disturbs me greatly. Don't misunderstand me, I'm as big a proponent for renewable and alternative fuels as the next guy. However, Chet Culver's little pet project that he campaigned for is possibly going to pass the Iowa Senate and Iowa House without any mechanisms for proper oversight or any real direction for how the money will be doled out or for what purposes. This could end up being a gigantic tax payer funded government slush fund. Remember the last time an Iowa Democratic Governor got a gigantic fund to play around with? Yep, the General Assembly gave Tom Vilsack the Iowa Values Fund and almost since its inception, critics on both sides of the aisle have sent up red flags about how the money is spent, if the results have been suf ficient, and whether there is enough documentation to back up the transactions and results of the projects that were funded by the Values Fund. The biggest critic, ironically, was Ed Fallon who was right on in his criticism of Vilsack and former Economic Development Director Mike Blouin. The truth is, the Values Fund has not lived up to its billing. It has only created a fraction of the output it was expected to unleash and there has been alot of shadows surrounding the oversight of the board.

Labels: biofuel, taxes

He wants the IRS to compile all of the information on you and just send you a refund check or a bill come tax time ... he complains that people don't know how to do their taxes, yet he's going to send them their tax bill/refund and count on them to know whether it's accurate or not? They're going to just assume (there's that word again) that the IRS wouldn't possibly screw them over and sign it and send it back. Which is what the left wants people to do, really. Just shut up and pay what they tell you to pay. ... The current system, as even a lefty at Ezra Klein points out, is designed to make paying taxes an afterthought. You don't see or feel the income being literally picked from your pocket, because you never had it in your hands in the first place. Oh, you see the deductions on your paystub, but that's about it. You never feel the impact of having a chunk of your money being taken from you. Which is a major reason why tax cuts do so much to pump up an economy. All of a sudden, people think they're making more, so they spend it. They're not making any more than they were, they're just keeping more of it in their pocket, rather than send it off to the tax man.

Labels: John_Edwards, taxes

Just when you think that the Iowa Legislature couldn't possibly find stupider tax legislation to propose, they surprise you. Consider SF 547, introduced yesterday by Dubuque's Senator Michael Connolly. It would add the following to Iowa's tax law: "422.76 TAX HAVENS AND SHELL CORPORATIONS. ..." There is so much wrong with this bill that it's hard to know where to begin. The bill in effect imposes state-level foreign exchange controls on Iowa businesses and financial institutions - an economic approach usually associated with failing third-world dictatorships. It would give the Department of Revenue almost unreviewable power ("beyond a reasonable doubt") to impose punitive taxes on offshore investments. Never mind that it's entirely normal to conduct cross-border operations using corporations set up in the country where operations take place. If the sophisticated financial geniuses at the Hoover Building decide you are doing it to avoid taxes, you are out of luck.

Labels: taxes