Branstad proposes slashing property, income taxes for businesses to create jobs

ANKENY – Republican candidate for governor Terry Branstad is proposing slashing commercial property taxes and cutting Iowa's corporate income tax rate in half as a way to create new jobs.

At a news conference Monday, Branstad said business leaders in the state are calling Iowa's commercial property taxes and state corporate income tax road blocks to job creation.

The former governor, who is launching a comeback bid, said his approach to job creation is to improve the state's tax and business climate to make Iowa more competitive.

“If we're going to compete globally and nationally, we must compete right here in our Midwest region,” said Branstad, who served governor from 1983 to 1999.

Under his proposal, corporate income tax rates would be cut in half, which would mean the top rate of 12 percent would be reduced to 6 percent. Branstad estimates that would amount to over $80 million per year.

“We know this won't be easy, and it won't be accomplished overnight, but it must be done if we're to grow our economy and attract more business, especially small business, and entrepreneurs to our state,” Branstad said.

Branstad called Iowa's commercial property taxes among the highest in the country. The state corporate income tax rate of up to 12 percent is the nation's highest marginal rate, according to Branstad's campaign.

Branstad is proposing reducing commercial property taxes to less than the Midwest average by taxing new commercial property at a portion of its value. Commercial property owners would see taxes phased down over a period of 4-5 years for existing properties.

Branstad said local governments would see additional revenue from new businesses, and that the state would work with local governments to make up whatever shortfall might occur as taxes are lowered on existing businesses.

To illustrate how property tax cuts can stimulate growth, Branstad cited examples of companies that chose to locate operations in Iowa after the state decided to eliminate the property tax on industrial machinery and equipment.

Branstad chose to unveil his latest proposal at an Ankeny company that produces software for agricultural businesses.

Shelley Laracuente, who owns the firm with her husband, said property taxes for the building have doubled over recent years.

“We believe in paying taxes, and we believe in supporting our community, but at the same time, we also want to be able to hire new employees,” she said.