Simplify tax laws, Iowa chambers of commerce say

DES MOINES - An organization that represents business interests in Iowa's 16 largest metro areas continues to push for a simpler state tax laws and more research into addressing the state's workforce needs.

The Iowa Chamber Alliance on Wednesday unveiled its 2015 legislative agenda, which included policy recommendations in tax law, workforce development and funding for road and broadband infrastructure.

The alliance called for simplifying Iowa's tax code in order to compete with neighboring states for business investment. Chris McGowan, president of the Siouxland Chamber of Commerce, said he sees firsthand how Iowa's complicated tax code can turn off businesses.

'Our own substantive analysis makes it clear that complex taxes make Iowa less competitive and require a cumbersome explanation of our tax system to perspective businesses,” McGowan said. 'In economic development, if you are explaining, you are losing.”

One legislative proposal from Iowa House Republicans has been to give taxpayers the option of filing under the current system or choosing a lower, flat rate while eliminating deductions and federal deductibility.

Chamber Alliance Executive Director John Stineman called the proposal 'political accommodations.”

'At the end of the day, if we'd be able to market lower rates, I think that we would still be in much better shape than we are today,” he said. 'But you're not wrong in pointing out that if we have two systems, that could be interpreted as complex.”

Iowa falls in the bottom tier of states in tax climate complexity and business environment for small and medium businesses, according to a study commissioned by the Chamber Alliance and published Wednesday by the Chicago-area consulting firm Deloitte.

'We need to work on our tax complexity and we need to work on our overall business environment,” Stineman said. 'That business environment for small and medium businesses is not as conducive as it could be for economic growth.”

Stineman said the alliance also will watch with interest the results of a new Battelle study on Iowa's business climate, set to be published by the end of the year. The alliance also called for the state to conduct an in-depth study on the condition and future of Iowa's workforce.

'What we need is a 5- or 10-year look forward and a blueprint,” Stineman said. 'We need to examine what other states have done where there's been success. We need to examine what our specific needs are by geography, by labor shed, by sector, so that we can implement real strategies to affect it.

'We've kind of examined different parts, but we haven't necessarily really examined the whole.”

The Chamber Alliance joined multiple other advocacy organizations in supporting an increase in transportation infrastructure funding, which could include raising the gas tax. Tara Barney, president and CEO of the Quad Cities Chamber of Commerce, said Iowa's road system 'requires immediate action this year.”

'We can't afford to continue to put off our infrastructure needs in this state. County roads are fundamental to our economic growth,” Barney said. 'The alliance really maintains hope that a bipartisan solution to generate necessary revenue will be an outcome of 2015.”