SHARE:
Policy Points from Iowa Fiscal Partners

Posts tagged Mike Owen

Tuition rising: Do students approve?

Posted November 16th, 2018 to Blog
As I spoke to a University of Iowa finance class this week, I wondered: Did they vote?
I showed these students data on a variety of issues, closing with the reversal from state support to tuition as the largest share of funding Iowa universities, an issue affecting most if not all of the class. Here is what it looks like for the University of Iowa:
unnamed-1
We have more about this in our new “Roadmap for Opportunity” series. See this two-pager.
Today, The Gazette of Cedar Rapids landed on my doorstep with a page 1 story about the Board of Regents’ plans to raise tuition 3 percent to 5 percent a year for the next five years at the UI and Iowa State University. The size of the increase will depend on new funding. An increase of at least 3 percent a year results from years of cutting.
My talk to the finance class came six days after Iowa voters retained Statehouse leadership that has forced the regents to tell families to plan on tuition increases for the next five years. The regents’ plan implicitly shows they expect more of the same from the Legislature and Governor.
I told the students that I hoped they had voted, and that they would pay attention to the impacts of public policy choices on their lives. Maybe they did, and maybe they are OK with the policy choices made, and coming.
They will be living with these impacts — student loan debt among them — long after many of us are gone. If they want something different, they will have to speak up, and they will have to do so in large numbers.
M
Mike Owen is executive director of the nonpartisan Iowa Policy Project.
mikeowen@iowapolicyproject.org

Restoring equity in tax policy — Plug tax loopholes

Posted November 15th, 2018 to Blog

Through the years in Iowa, very few lawmakers have had the courage to take on an utter abomination in our corporate tax system: tax loopholes.

It is one thing to expressly pass a tax preference — a credit, exemption or deduction — with a specific purpose, clearly defined for all taxpayers to see and reviewed for its effectiveness. (Iowa does not provide such accountability with many such preferences, but that is for another post.)

It is quite another thing, however, to see weaknesses in your tax code exposed and exploited by large companies, and to leave those holes open for routine abuse. Welcome to Iowa.

A new report by the Center on Budget and Policy Priorities discusses this issue as part of overarching tax policy that states can use to advance racial equity and sustain services responsibly. From the report:

States can nullify a variety of tax avoidance strategies employed by large multistate corporations by adopting a reform known as “combined reporting,” which treats a parent company and its subsidiaries as one entity for state income tax purposes, thereby minimizing companies’ ability to shift income earned in a state to other states that are tax havens (like Delaware and Nevada).

The figure below shows Iowa is out of step with the majority of states on this issue. All but one of our neighboring states has a corporate income tax, and all but one of those states has combined reporting to stop companies from avoiding taxes that were originally intended by the tax code to be collected.

The Iowa Policy Project and Iowa Fiscal Partnership have been encouraging Iowans to look at this issue for many years. We made it part of our 2018 Tax Policy Kit — explaining here how Iowa could save itself tens of millions of dollars that are squandered to companies that effectively set their own tax policy. The Iowa Taxpayers Association consistently defends this break that not only burdens our state, but tilts the playing field to big, multistate corporations and against Iowa-based, Iowa-focused businesses.

Two governors, Tom Vilsack and Chet Culver, at times proposed adoption of combined reporting, but the issue — while getting some attention at the committee level — has not reached a floor vote in the House or Senate.

Iowa’s tax code needs to be fair to all residents. It needs to generate revenue to sustain services that are important to all residents, from education to water quality to law enforcement to health care. To allow corporations to set their own rules by exploiting weaknesses in the tax code defies these oft-stated Iowa values of fairness and accountability.

Posted by Mike Owen, Executive Director of the Iowa Policy Project.

mikeowen@iowapolicyproject.org

Tax reality: No pumpkin spice added

Posted November 1st, 2018 to Blog

You find it everywhere these days: pumpkin spice this, pumpkin spice that … tax cuts this, tax cuts that. It’s so easy to overdo it — with pumpkin spice or with tax-cut rhetoric.

Keep it simple. The tax cuts are for the wealthy, and come at great cost of services while making the tax system less fair.

Just ask the Iowa Department of Revenue, which produced the following analysis in May, just before state legislators rammed their backroom tax package for the rich through both houses of the Legislature and to the Governor’s desk. Yes, she signed it.

And here are the numbers behind those sections of the pumpkin above:

Put another way, almost 40 percent of resident taxpayers will get about 3 percent of the benefit of the tax cut in tax year 2021; over four-fifths of taxpayers will together see only about 26 percent of the benefit. On the other hand, the top 2.5 percent — families making over $250,000 — will receive 46 percent of the benefit.

This was a tax cut for the richest Iowans, who did not need a cut, and the bill overall will cost almost a half billion dollars in 2021.[1]

These effects have been apparent for months,[2] despite claims that are obvious distortions, according to the Department of Revenue analysis.

That analysis shows the average tax change in tax year 2021 for people making between $50,000 and $60,000 — this covers the latest median-income level of $58,570 — would be a $156 cut, or less than $3 a week. Don’t spend it all in one place. Meanwhile, the cut for millionaires would, on average, be $24,636.

By the way, the “fact checkers” who let loose-speaking pols off the hook for their exaggerations about tax cuts are often missing a critical point: Many Iowans, including some middle- and moderate-income working families, actually will see tax increases, or no change at all, if the new law is not changed.

Of course, most won’t see these effects right away, despite the promises. How convenient.

Mike Owen is executive director of the nonpartisan Iowa Policy Project in Iowa City. mikeowen@iowapolicyproject.org.

 

[1] Iowa Department of Revenue analysis for Legislative Services Agency, May 2, 2018

[2] Charles Bruner and Peter Fisher, Iowa Fiscal Partnership, “Tax plan facts vs. spin,” May 5, 2018, http://www.iowafiscal.org/tax-plan-facts-vs-spin/

See also: “A Roadmap for Opportunity: What real tax reform would look like,” Iowa Policy Project, http://www.iowapolicyproject.org/2018docs/180906-roadmap-taxes.pdf

IPERS defenses are ‘care tactics’

Posted October 30th, 2018 to Blog

IPERS, the Iowa Public Employees’ Retirement System, has come under attack in recent years for no substantive reason — only ideology and politics. Understandably, IPERS members, who number well over 10 percent of the population of Iowa, are concerned.

So, some folks are engaged in what might be called “care tactics,” to make sure the stakes on that issue are well-understood. People who care want good information, and are asking for it.

These efforts and concerns are being dismissed by those who claim there is no threat to IPERS. Political scare tactics indeed are part of the 2018 campaign on several issues — primarily taxes, as illustrated by the hair-on-fire ads on television that do more to distort than inform.

But it’s hard to make that case about pension concerns, which stem directly from leaders’ comments, proposed legislation and a longtime goal of ideologues on the right who have become more strident.

Those now dismissive of pension concerns point to recent campaign-season comments by Governor Kim Reynolds. Yet not so long ago Reynolds herself raised the prospect of some change in IPERS’ actual pension structure to a “defined contribution” or 401k-style structure for new employees.[1] Her predecessor, Terry Branstad, had made similar comments.[2] Legislation was proposed in 2017 in the Senate.[3] All of this remains fresh in the minds of those who are worried, as do efforts by others to undermine IPERS.

IPERS critics have promoted that riskier “defined contribution” structure, needlessly scaring Iowa taxpayers about Iowa’s secure IPERS system. The Des Moines Register has run such scare pieces, by Don Racheter of the Public Interest Institute[4] and by Gretchen Tegeler of the Taxpayers Association of Central Iowa.[5]

Neither the media nor IPERS critics have been able to explain how a separate system based on a 401k style structure — “defined contribution” — could be introduced for new employees without undermining existing and promised IPERS benefits for current members.

Contributions plus Interest investments equal Benefits plus Expenses in administration of the system— this is what is required for full funding of IPERS. If you reduce that first item, contributions, by setting new employees apart in a different plan, clearly that matters. It’s math.

In fact, it affects more than those new employees. Reducing contributions by diverting those from new employees reasonably means lower benefits — for current members!

The media and all policy makers should be asking more about this. It’s not enough to accept a “nothing to see here” argument from someone who in the recent past declared herself open to a change — especially when activists have pushed for it, and legislation has been proposed. The dismissal — not exposing it — is the “scare tactic.”

Let’s stay away from the “scare tactics,” and focus on the “care tactics.”

 

[1] Ed Tibbetts, Quad-City Times, “Reynolds says state looking at IPERS task force,” Jan. 26, 2017. https://qctimes.com/news/local/government-and-politics/reynolds-says-state-looking-at-ipers-task-force/article_bf76d410-c70b-5300-951c-ad1cb6bced3f.html

[2] William Petroski, The Des Moines Register, “IPERS cuts key target; unfunded pension liabilities up $1.3 billion,” March 24, 2017. https://www.desmoinesregister.com/story/news/politics/2017/03/24/ipers-cuts-key-target-unfunded-pension-liabilities-up-13-billion/99600866/

[3] O. Kay Henderson, RadioIowa, “Democrats accuse GOP of plotting that IPERS be dismantled,” December 11, 2017. https://www.radioiowa.com/2017/12/11/democrats-accuse-gop-of-plotting-that-ipers-be-dismantled/

[4] Don Racheter, Public Interest Intitute “Replace IPERS with defined-contribution plan,” The Des Moines Register, May 27, 2016. https://www.desmoinesregister.com/story/opinion/abetteriowa/2016/05/17/replace-ipers-defined-contribution-plan/84492576/

[5] Gretchen Tegeler, Taxpayers Association of Central Iowa, “Don’t minimize Iowa’s public pension debt,” The Des Moines Register, January 16,2018, https://www.desmoinesregister.com/story/opinion/columnists/iowa-view/2018/01/16/iowas-public-pension-debt-eclipses-other-public-debt/1035979001/; also “Public retirement systems are not ideal for young, mobile employees,” The Des Moines Register, December 8, 2016, https://www.desmoinesregister.com/story/opinion/columnists/iowa-view/2016/12/08/public-retirement-systems-not-ideal-young-mobile-employees/95148216/

 

Mike Owen is executive director of the nonpartisan Iowa Policy Project. mikeowen@iowapolicyproject.org

 

 

 

Food for the fact-checkers

Posted October 12th, 2018 to Blog

At the Iowa Policy Project, we are nonpartisan and we do not support or endorse candidates for office. Rather, we hope those who do, and the candidates and parties themselves, will conduct their discussions on a foundation of fact.

When they do not, we just might throw a penalty flag. Our work is public policy research and analysis, to help people see what is fact and what is not, and to introduce context where it is missing. This is not always easy with complex issues, and there are gray areas. Where bad information is being spread, that interferes with the mission of our work, so we will do what we can to keep that record straight.

Very early in Wednesday’s debate between Governor Kim Reynolds and businessman Fred Hubbell, the Governor made at least two clearly unsupportable claims about taxes. These are issues we cover constantly.

First, the 2018 tax overhaul not only was costly, but overwhelmingly benefited the wealthiest. Any suggestion to the contrary is simply unsupportable, using data provided by the Iowa Department of Revenue in May before the bill passed. Those supporting the bill knew this would be the impact, and those writing it drew it that way.

According to the department, the legislation will mean either no change, or an actual tax increase, to nearly a quarter of resident taxpayers — 23.3 percent — in tax year 2019. For those who receive cuts, the average cut for millionaires was projected to be $20,021; for someone between $60,000 and $70,000 adjusted gross income, the cut was projected to be a tiny sliver of the benefit compared to millionaires — $232.

This flatly negates the Governor’s comment that, “In 2019, virtually every single Iowan will see their taxes go down.” This is clearly inaccurate. Further, as the law is phased in, the continuing impact will be that some will lose, some will not. Unquestionably it will affect public services as hundreds of millions in revenues are cut — which means Iowans who depend upon those services, and that is most Iowans, will lose even more.

Second, the Governor in pushing for new corporate tax cuts chose to play to the myths about business taxes promoted by the business lobby to drive down Iowa’s already low business taxes.

Business consultants have exposed the hollow core of this claim, most recently the Anderson Economic Group, which in June ranked Iowa 15th lowest in state and local business taxes (all of which are governed by state policy). Iowa business taxes consistently have been shown to be competitive.

For more information about both the tax legislation and Iowa taxes on business see these resources:

What real Iowa tax reform would look like, Iowa Policy Project “Roadmap for Opportunity” series, August 2018.

Iowa tax overhaul: Sorting facts, key points from spin, Iowa Fiscal Partnership, May 2018

Myth-Buster: Competitiveness no problem for Iowa taxes, Iowa Fiscal Partnership, March 2018
The problem with tax-cutting as economic policy, Peter Fisher, Iowa Policy Project, GradingStates.org
Mike Owen is executive director of the nonpartisan Iowa Policy Project. mikeowen@iowapolicyproject.org

The weekend Iowans fool themselves

Posted August 3rd, 2018 to Blog

It’s here again — the weekend when Iowans buy into some really bad political spin, but leave happy about it because they don’t pay tax on the purchase.

Today and Saturday are the dates of Iowa’s sales tax holiday, which we have noted many times — including here, here and here — is a shopping bag full of nonsense.

As IPP’s Peter Fisher noted in 2014, the third link above, “Who’s to say a retailer, with this officially sanctioned ‘holiday’ marketing, won’t bump prices by 10 percent or call off a 20 Percent Off sale that might have been in place?” Instead of revenue for schools, it’s a recipe for a retailer’s windfall.

Iowa media quite often play along, with rarely a discouraging word challenging the notion of the break, questioning whether any break actually results, and, importantly, how much it costs public services. (It was $1.6 million in its first year, 2000, and by 2015 the break was valued at $3.6 million lost to services.)

Neither does the Iowa Department of Revenue shed light on these issues, which are at least as important as a list it offers of what you can and cannot buy tax-exempt on these hallowed anti-tax days.

Certainly, the sales tax is one that disproportionately hits lower-income people harder than high-income people. The evidence is clear on that. And reducing the impact of the sales tax year-round would be a sensible step if paired with an income-tax increase affecting higher-income people — same revenue, fairer approach.

But this break goes to anyone, so those very wealthy Iowans who are the largest beneficiaries of the income-tax cuts passed in 2018 also get an extra break here.

And there we have the two largest problems with Iowa tax policy: It is inequitable, and it is based on political spin that ultimately harms the public services we depend upon.
Mike Owen is executive director of the nonpartisan Iowa Policy Project in Iowa City. mikeowen@iowapolicyproject.org

15 yards, loss of revenue

Posted May 31st, 2018 to Blog

It’s time to throw the penalty flag on Governor Kim Reynolds. Her remarks about the tax cuts she signed into law Wednesday for the wealthy fail any test of accuracy. Iowans need to know the facts.

It would be different if she had acknowledged, and made a case for:

•  massive tax cuts for the wealthiest.
•  cutting revenues, assuring continued suppression of education and opportunity, public health and safety and investments in the future of Iowa.
•  continued massive corporate tax giveaways, as business tax credits have doubled in five years.

But those were not her messages — and those messages will not be repeated here. The Governor is (1) deceiving Iowans about some policies she has adopted, and (2) ignoring likely damage to the economy from these tax cuts.

She even put off some forward strides she had suggested but abandoned during the recent legislative session. The concept of “reform” is gone, as the bill does nothing to simplify taxes for at least four years, and leaves in place a system that already was heavily skewed to benefit the wealthy.

Here are a few critical realities:

  The income tax savings to a middle class family next year are only $3 to $4 a week (according to the Department of Revenue) — while the sales tax increase will offset such savings for many.
  Millionaires, on the other hand, will see on average an $18,773 cut for the year.
  Larger tax cuts scheduled to take place in five years might not happen because they are triggered by a revenue target that will be very difficult to meet. (But count on tax-cut proponents to campaign on them.)
  Instead of adjusting taxes in a way that cuts would be paid for, this legislation will actually take $300 to $400 million a year out of the budget. Those dollars could have gone to adequately fund education or public safety or mental health care.
  The bill makes $40 million in corporate income tax cuts.
•  The bill provides an unneeded tax break for wealthy earners of “pass-through” income from business.

Meanwhile, the bill fails to reform business tax credits, which have doubled in five years, to $400 million. And it also fails to raise the standard deduction or eliminate federal deductibility, both of which the Governor had proposed but compromised away.

As reviews and promotions of the tax bill proceed, keep these points in mind. And watch for more information, because the analysis will continue on a bill developed in secret, for signing at an invitation-only ceremony.

Mike Owen is executive director of the nonpartisan Iowa Policy Project. Contact: mikeowen@iowapolicyproject.org

Public hearing: Public concerns distracted

Posted April 10th, 2018 to Blog

If the goal of a “tax reform” public hearing Monday was to distract Iowans from the massive impact the Governor’s $1.7 billion tax cut would have on their lives, it succeeded.

The media attention on the hearing in the old Supreme Court Chamber in the State Capitol focused heavily on the perennial fight between banks and credit unions — one that won’t be settled whatever happens in 2018, and not the most important issue to be settled in 2018. Therefore, we won’t link to those stories here and add to the distraction.

But, those folks on both sides of the bank-credit union fight took many of the limited speaking slots, so the media focus followed. For their part, House Ways and Means Committee members listened politely, asked no questions and let 30 or so people — including this writer — have their say in three-minute chunks.

It was the public’s only chance thus far to speak on a bill that was introduced two months ago … that may barely resemble what House leaders actually plan to pass … with no disclosure about which of the public speakers may be getting more than three minutes behind closed doors as well.
We should all have been brought to the table long before this, and attention directed to what is really on that table about the future of our state.

Iowans need to focus on the very real threat to public services, from education to law enforcement to water quality to human services that have gone lacking as our state has increasingly directed subsidies and tax breaks to corporations and the wealthy, neither of whom need help.

One good resource for all lawmakers, advocates and the public at-large is a series of concise, fact-based two-pagers in the 2018 Tax Policy Kit from the Iowa Fiscal Partnership. Find those pieces here.

If they were listening closely, lawmakers on Monday will have gleaned some important perspectives on the monumental tax changes that are being contemplated without sufficient review.

Lawmakers still have an opportunity to do this right — to steer Iowa’s tax system to a more stable, accountable and fair system that assures giant companies are paying their fair share and the poor are not penalized for their low incomes. Iowa can have responsible tax reform that does not lose money needed for traditional, critical public services that benefit all Iowans. Our focus should be there.

Mike Owen is executive director of the Iowa Policy Project. mikeowen@iowapolicyproject.org
Also see:

Perils of a constitutional convention

Posted March 21st, 2018 to Budget, Economic Security, Health, Taxes

•  Article V authority gives no guidance

•  No control, great risk to freedom and representative government. 

Basic RGB

 

By Mike Owen, Executive Director, Iowa Policy Project

Throughout our nation’s history, Americans have been able to depend on the Constitution to be at once our guidepost and our ultimate arbiter of disputes over the bounds of authority. Resolutions now before the Iowa Legislature — ostensibly for specific purposes — actually could put our entire Constitution at risk.

What is Article V?

The Constitution does provide in Article V for states to call for a convention to address changes to the Constitution. However, the authority came with no rulebook. In fact, as many have noted, the original Constitution was called by states to amend the Articles of Confederation that had established a weak national governing structure following the American Revolution. Rather than accept that charge, the convention set its own course and wrote an entirely new governing document that has stood the test of time. And it has been amended in an orderly manner as circumstances —and the nation — demanded. Twenty-seven amendments to the Constitution have been made, from the first 10 establishing a Bill of Rights, to others such as abolishing slavery, establishing voting rights for women and 18-year-olds, repealing Prohibition, barring congressional pay raises during a current term, and providing for an orderly transition of power in the event of a President incapable of serving or a need to fill a vacancy for vice president. As needs have been identified, and support established for change, the Constitution has evolved.

Changes would have to be ratified by states. However, this does not protect against rash decision-making by a rogue convention; a convention could make new rules for ratification, or make its own rules to govern how or whether future changes could be made.

In Iowa

There are joint resolutions in both the Iowa House (HJR12) and Senate (SJR8) calling for a constitutional convention. They would have to pass in identical form. Both have very broad language for an Article V convention “to propose amendments to the Constitution of the United States that impose fiscal restraints, and limit the power and jurisdiction of the federal government, …” It is hard to imagine any federal authority that would not fit under that language — in other words, all bets are off for which issues might be considered.

The vast uncertainties are indisputable. A fiscal note on HJR12 from the nonpartisan Legislative Services Agency notes the uncertainties with such a convention: “The fiscal impact of HJR12 cannot be determined as it unclear how a constitutional convention would be administered, assuming the required number of states successfully petitioned Congress to initiate such a convention. In addition, it is uncertain how many Iowa delegates would be appointed to attend, how much the delegates would be compensated, or how long a convention would last.”[1]

This is not a home-grown movement, but one pushed by national forces — it is a priority of ALEC, the American Legislative Exchange Council, a corporate friendly bill mill for model legislation it puts in state lawmakers’ hands to get passed in their states. Only two organizations, both ideologically right-wing organizations, including the out-of-state “Convention of States,” have registered in favor of the resolution — while an ideologically diverse mix of organizations are registered against it.

This is not a partisan issue. While the Iowa House approved its resolution on party lines in March 2017, the move has failed in a floor or committee vote in seven Republican-controlled state legislatures (Kansas, Idaho, South Dakota, North Carolina, Utah, New Hampshire, Wyoming) in 2017 or 2018.

Convention of States is a Constitutional Convention. Scholars have noted that convention advocates appear to have adopted a specialized language in which the term “constitutional convention” is reserved for conventions that write constitutions from scratch, not conventions that amend existing constitutions. One of these scholars, David A. Super of Georgetown University Law Center, has noted that there is no authoritative support for this definition. But even if one accepts this peculiarly narrow terminology, what Convention of States proposes is, in fact, a constitutional convention. Once convened under Article V of the Constitution, this convention could propose any amendments it pleased, including the wholesale replacement of our existing Constitution. In any event, the distinction is meaningless, as the convention is proposed under Article V, and as noted, there are no rules set in the Constitution for such a proceeding.

 

 

Mike Owen is executive director of the nonpartisan Iowa Policy Project (IPP) in Iowa City, and project director of the Iowa Fiscal Partnership, a joint public policy analysis initiative of IPP and another nonprofit, nonpartisan organization, the Child and Family Policy Center in Des Moines.


[1] Iowa Legislative Services Agency, Fiscal Note on HJR12, March 19, 2018. https://www.legis.iowa.gov/docs/publications/FN/955813.pdf

A poisoned process

Posted February 28th, 2018 to Blog

As early as today, a bill may be debated in the Iowa Senate to drastically slash revenue for public services — phased in at a cost of over $1 billion a year, or about one-seventh of the state’s General Fund.

The Senate bill, as does any legislation with a fiscal impact, comes with a “fiscal note.” This analysis by the Legislative Services Agency, using Department of Revenue data, was made available sometime late Tuesday. The legislation itself was introduced a week ago today, and passed out of subcommittee and full committee the following day.

The legislation is so complex that it took the state’s top fiscal analysts a week to put together their summary, which includes four pages of bullet points in addition to tables of data about various impacts. The nonpartisan analysis finds that the wealthiest individuals and most powerful corporations once again are the big winners.

The timing of the official fiscal analysis was only the latest example of cynical approach to public governing that has slapped brown paper over the windows of the gold-domed sausage factory in Des Moines.

This General Assembly was elected in 2016. It is an understatement to suggest that this legislation could easily have been developed through the 2017 legislative session or the months leading up to this session. The public who will be affected, and advocates across the political spectrum, could have weighed in, and independent fiscal analysis considered.

Many have tried to educate the public about what is at stake for Iowa — including the Iowa Fiscal Partnership, which among other activities brought in experts from Kansas last year to show what has happened there with similar tax slashing. IFP also offered a reminder in October of what real tax reform could include, and later about both open government and the folly of Kansas’ course. Last week, we warned about the fiscal cliff ahead.

Everyone knew the legislative leadership and Governor wanted to do something to cut taxes, but no specifics were available, just a couple of hints with no real context. The session opened in the second week of January, and it wasn’t until most had left the building on the second-to-last day of February that a fiscal analysis magically appeared.

With a more transparent and deliberate process, everyone — including and especially the legislators who will be voting on it — would have had a chance to get full information about its impacts.

Instead, it is being rammed through. Regardless of whether the legislation itself is good or bad, the process has poisoned it. And perhaps it has poisoned governance in Iowa for years to come.

There are elements of the commentary defending and opposing this legislation that show general agreement on two key points of what meaningful, responsible tax reform would entail. On both sides, there is recognition that:

•  removing Iowa’s costly and unusual federal tax deduction would enable a reduction of top tax rates that appear higher than they really are; and

•  corporate tax credits are out of control and costing the state millions outside the budget process, while education and human services suffer.

The process, however, has shielded from public view a clear understanding of how the specifics of this legislation would affect two principles central to good tax policy: (1) the purpose of raising adequate revenues for critical services, and (2) raising those revenues in a way that reflects ability to pay — basic fairness of taxation, where Iowa (like most states) has a system that shoves greater costs on low-income than high-income taxpayers.

It also has raised to the altar of absurdity a ridiculous image of the competitiveness of Iowa taxes, which independent business consultants’ analysis has shown to be lower than half the states and in the middle of a very large pack that differs little on the state and local business taxes governed by state policy. (chart below)

Ernst&YoungFY2016

As the process moves from the Senate to the House, these concepts of good governance need to be central to timely debate, not just fodder for editorial pages afterward.

2017-owen5464Mike Owen is executive director of the nonpartisan Iowa Policy Project, and project director of the Iowa Fiscal Partnership, a joint initiative of IPP and the Child & Family Policy Center in Des Moines. mikeowen@iowapolicyproject.org