Iowa is a slow-growth state. This is a fact we see reflected in everything from smaller than predicted state revenue, to stagnant K-12 enrollment, and low numbers in unemployment. The pipeline for growth in Iowa has been steadily drying up and we are starting to see the bad effects on the overall economic health of our state. To jump-start our economy and increase our competitiveness with other states in the region, we need to immediately and dramatically modernize Iowa’s income tax system.
The last time we took steps to modernize our state’s income tax system was when I pushed through cuts and reforms as speaker of the House nearly 20 years ago. In the two decades since, other states have modernized their tax codes and become more competitive while Iowa has only made our tax code more complicated with deductions for special interests. Our overly complicated tax forms now just are three lines shorter than the federal government’s tax forms. Iowa has fallen behind.
The tax plan I’ve put forward as part of my New Game Plan for Iowa will make our state more competitive by focusing on individuals. The net effect will be more Iowans wanting to stay in Iowa and more families from around the country deciding to call Iowa home. When that type of growth occurs, a business boom and job creation will follow. Currently, we don’t have enough workers to fill jobs in our state and we don’t have a big enough pipeline of young Iowans in school to keep up with baby boomer retirements in our current workforce.
Currently, when people look at moving to Iowa, they are hit with the sticker shock of our top rate at 9 percent. I propose reducing Iowa’s individual income tax rate for all taxpayers to 3 percent. To offset the costs of the reduced rate, I will modernize our state tax code by eliminating the out-of-control number of special interest deductions. My plan also calls for raising the state sales tax by one penny.
In 2010, Iowans voted to create a special fund to address water quality issues in our state. That account was to be funded by a 3/8-cent sales tax. Now, seven years later, lawmakers have yet to act on the will of the people. My plan recognizes and honors the voters of Iowa and fully funds water quality in Iowa with the 3/8 penny and puts the other 5/8 of the penny increase to work offsetting the income tax reduction.
So far, we have not seen a tax plan from my fellow Republican candidates for governor, including Gov. Kim Reynolds. I can tell you from experience that proposing, promoting and passing tax reform is a big challenge. It takes a lot of time and work. Special interest groups throw everything they have at maintaining the status quo.
The legislative session begins this week. If tax reform truly is a priority for this administration, Iowans deserve time to review proposed plans and be part of the conversation. I don’t believe in top-down decision making, and I know most Iowans don’t either.
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The plan I’ve outlined in my New Game Plan for Iowa is much simpler than our current tax system, is more fair than our current system, and it finally will make Iowa competitive again. All of this will lead to a season of economic growth which will make Iowa a more attractive place to live and ultimately will help address our current and population crises.
I’m putting my plan in front of Iowans to jump-start the conversation so they know what type of leader I will be as governor.
• Ron Corbett is a Republican candidate for governor and the former mayor of Cedar Rapids.