Monday, January 12, 2009

Tax Breaks Bleed State Revenue Dry

The Des Moines Register writes today about how tax breaks are bleeding Iowa's state revenue dry.

Hundreds of millions of dollars are spent each year on tax incentives and grants for Iowa’s businesses or residents, some of which are depriving the state of revenue, tax reform advocates say.

And legislative leaders - who acknowledge they are facing the greatest financial squeeze since the 1980s farm crisis - say it's time to evaluate and possibly chop some of the incentives when the 2009 session of the Iowa Legislature convenes at 10 a.m. Monday.

Up for grabs are more than 200 sales, income or property tax exemptions as well as dozens of tax credit programs that range from tax breaks for the purchase of argon gas to programs that refund millions of dollars every year to companies doing research in Iowa.

The exemptions - many decades old - were put into place for Iowa to remain or become competitive for high-paying jobs and skilled workers.

But many of the incentives have been on autopilot, dragging on for years without an examination of what benefits they provide to Iowans.
One of the programs discussed is the Iowa Values Fund. The Values Fund has spent $50 million for the past 10 years to offer financial assistance to companies that create jobs in the state. The Values Fund has been very controversial with opponents on both side of the aisle.

The question shouldn't be about raising taxes or cutting taxes. The question is about outdated tax breaks that are handed out to people that don't need them.

1 comment:

Jerry said...

So Ed Fallon was right. He campaigned on this issue for years.