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What legislators pleading low revenues seldom admit is that their dilemma is largely self-inflicted. Revenues given away are revenues that cannot be used to invest in schools.
Legislators must decide if a boon to specific Iowans is more important than improving the lives of all Iowans with better funding of schools and other priorities with revenue otherwise lost.
“Too often, we see public officials relying on these rankings and the policy prescriptions they promote, when in fact the rankings have no predictive value for economic growth,” said Fisher.
Iowa lawmakers’ budget dilemma this year is largely self-inflicted — revenue shortfalls a product of legislators’ penchant for tax cuts over the past 20 years.
The big winners would be those with the highest incomes.
The optional flat tax bill recently introduced in the Iowa House would give $26.5 million in tax cuts to people living outside the state, including almost 5,000 non-resident millionaires.
Tax cuts have dramatically reduced state funding for schools, health care, and other services.
Millionaires do better than low- to moderate-income taxpayers by 273 to 1 under this bill. While millionaires would receive about $8,200 apiece on average — people making $40,000 or less would average only $30 in tax savings.
In Iowa as in most states, middle- and low-income people nationwide pay substantially more of their income in state and local taxes than wealthy individuals and families.
Designed to support start-up companies to do research, this costly program primarily benefits very large companies, with little scrutiny.