I favor tax relief.
The relief I favor is from worry that the state can pay its bills.
Each year the Iowa Legislature and Governor are required by law to create a balanced budget. The last two years, they couldn’t support their own budget as there was a revenue shortfall and mid-fiscal year cuts had to be made. These cuts equate with our government inadequately understanding the tax revenue stream.
In this environment it makes no sense for Governor Kim Reynolds to propose cutting taxes:
“The plan is projected to cut income taxes by $1.7 billion by 2023, while maintaining expected growth rates in revenue,” according to the governor’s web site. “Even assuming no dynamic effect (economic stimulus) from federal or state tax reform.”
Everyone who believes that stand on your head.
A revised tax policy may be needed. Before Republicans get carried away with the idea some basic housekeeping is required.
Let’s go a complete fiscal year without having to amend the state budget.
Let’s understand how the agricultural economy impacts tax revenues.
Let’s pay back the rainy day fund that was tapped to make up for revenue shortfalls.
Let’s understand the impact of the business sales tax cuts Governor Branstad made.
Let’s understand the impact of business tax credits given to the Iowa Fertilizer Plant, Apple and others.
Let’s do as a state what we should have been doing with our budget all along.
Reading the governor’s tax proposal is like entering the Mad Hatter’s tea party. The March Hare offers wine to Alice, only there is no wine.
“It wasn’t very civil of you to offer it,” Alice said.
~ Submitted as a letter to the editor of the Solon Economist