Stimulate My Economy
Monday, February 9, 2009
Cut withholding taxes immediately.The US Senate is slated to vote on the next stimulus package tomorrow. Plenty of other bloggers are debating the merits of such a stimulus. I would prefer to simply offer up a suggestion because I believe another $780 billion in taxpayer money is a foregone conclusion.
My next paycheck is this Friday. If Congress and the President would cut my federal withholding taxes, I could have more of my money in my pocket this week.
That would sure be a lot faster than the stimulus payment my household received last year. It took about 4 months for the feds to send us a check after the legislation was authorized.
I'm not looking for a handout. However, if we are going to spend $780 billion, get the cash out there to the people immediately.
Cool Link of the Day
Read about the stimulus vote.
The Taxes I Pay
Thursday, February 5, 2009
Could I be taxed more?Okay, okay, I know I haven't posted much lately. I've actually been a bit depressed as I have begun work on my 2008 tax return. I am sick of paying taxes.
Let me share with you the list of taxes my household paid last year:
Federal Income Tax
Social Security Tax
Medicare Tax
State Income Tax
Property Tax
-City Property Tax
-County Property Tax
-School Property Tax
-Community College Property Tax
-County Assessor Property Tax
-Agricultural Extension Property Tax
-State of Iowa Property Tax
School District Income Surtax
State Sales Tax
Local Option Sales Tax
School Infrastructure Local Option Tax
School Infrastructure No Longer Local Option Tax
Federal Gas Tax
State Gas Tax
Auto Registration Fees
Capital Gains Tax
Utility Tax
And they still can't get the budget to balance. I am sick of it.
Cool Link of the Day
Track Iowa Legislation.
Real Commercial Property Tax Reform
Tuesday, January 20, 2009
The Hutcheson Plan (Draft Version)I have been fairly critical of the Iowa Legislature for not doing anything about Iowa'a commercial property tax problem. I have complained about the problem and complained about the proposed solution. So what would I do about it?
First of all, I would like to see governments reduce the property tax burden by controlling their spending. That won't happen on its own, so my pragmatic solution is offered in several points below:
-Eliminate the residential rollback and replace it with an increased (but non-refundable) homestead tax credit (perhaps somewhere in the neighborhood of $1,300 - $1,400)
-Rebalance the levy rate according to the new taxable valuations and credits
-Offer a 0.5% sales tax rebate to governments (cities and counties) that enter into shared service agreements that reduce their overall budgets by 5% over two years. The tax rebate would come from the state's 5% sales tax collection and would be used for additional dollar-for-dollar relief among all property classifications.
Optional or negotiable changes:
-Assess agricultural land according to market value instead of the production method
-Mandate an additional portion of the local option sales tax (say 1/4 of the 1% tax) be used for dollar-for-dollar property tax relief
Those governments that consolidate or share services would not only save their constituents money inherently, but they would also bring additional tax relief through the rebate. Why would the state be willing to divert 0.5% of its sales tax collections to local property tax relief? Right now, the economy is struggling and revenues aren't growing very quickly. We know that the economy will cycle back in the next few years and collections will increase again. When revenues do increase, it would be an opportune time to divert revenue growth to property tax relief.
This plan is rather simplistic, and it would be tough to get enough support to pass. However, it is one of few ways to actually provide tax relief without creating new taxes. I would certainly welcome your input, and would gladly adjust my plan if you have a better idea.
Thanks for listening!
Cool Link of the Day
Iowa Property Tax 101.
Iowa Commercial Property Tax Reform? Part 3
Sunday, January 18, 2009
This study committee was an excuse to do nothing.In my previous two entries, I have detailed some of the reasons why I am frustrated with the results of a two year effort by the Iowa Legislature to study the property tax issue.
As mentioned before, I am part of the Professional Developers of Iowa, and we have asked the legislature to do something about commercial and industrial property taxes each and every year. For two years now, legislative leadership has stalled the issue "because a committee is looking at it. We are anxious to see what they come up with."
The results: 9 new revenue streams.
I am frustrated because this study committee was used as an excuse to do noting. Further, it took two years to brainstorm nine new revenue streams. Two years.
We must demand more from the Iowa Legislature and Governor Culver.
Cool Link of the Day
Check out one blogger's prediction of the new congressional districts that are possible in 2012.
Iowa Commercial Property Tax Reform? Part 2
Thursday, January 15, 2009
75% Diversification, 25% New Spending. This is my second of three postings regarding the Legislative Property Tax Study Committee recommendations. Yesterday, I expressed my opinion that solving a tax problem with a new slate of taxes is not a solution.
Another problem that I have with the recommendations is this selection of text:
At least 75 percent of the new revenue will be used to reduce property taxes. Of that new revenue, at least two-thirds will be used to reduce commercial property taxes, and the remainder will be used to reduce taxes on other classes of property.
The remaining revenue will be used for:
o Public Safety
o Disaster Recovery and Prevention
o Infrastructure
o Energy Efficiency Improvements
o Service sharing that reduces the cost of government
Let's say some combination of these 9 new taxes and fees generates $10,000,000 in new revenue for a city. Of that, only $5,025,000 would go towards commercial property tax relief. The rest would go elsewhere. About $2.5 million would go to reduce residential property taxes and the other $2.5 million would go to new spending.
This is a fabulous example of how we continue to get taken. In other words, the legislature doesn't really want to do anything about property taxes. Rather, they want to bait us into a new revenue scheme. This taxpayer isn't getting taken this time.
Cool Link of the Day
See the new Republican Party of Iowa Chairman's Response to Culver's Condition of the State Address
Iowa Commercial Property Tax Reform? Part 1
Wednesday, January 14, 2009
Real reform must be combined with fiscal restraint.For the last two years, the Iowa legislature has outsourced Iowa's property tax imbalance to a legislative study committee. Frankly, I am quite disappointed in the results.
For the last few years, I have been part of a group of Iowa economic developers that has lobbied in Des Moines for commercial property tax relief. As a brief overview, commercial and industrial properties in Iowa carry the burden of county and local government. Because of the residential rollback, homes are taxed at approximately 50% of their value. Businesses are taxed at virtually 100% of their value. Just as an example, a small retail store in a building worth $200,000 might pay the equivalent of $670 per month just in property taxes. That is a lot of overhead for a small business.
One of the problems is that Iowa's property taxes are uncompetitive. It puts Iowa at a competitive disadvantage when courting new companies to Iowa.
The study committee came back with a list of recommendations to mitigate the property tax problem. Unfortunately, the bulk of the recommendations called for revenue diversification. Essentially, they detailed 9 new taxes that could be levied for the purposes of commercial property tax relief.
I'm glad the legislature realizes that the property tax burden is a problem. However, I'm quite disappointed that the recommended solution to a tax problem is a new tax.
Cool Link of the Day
Read the Legislative Property Tax Committee Recommendations
The Problem With 'Fair Share'
Sunday, January 11, 2009
Right to Work Laws Vital for Economic Development As noted on January 2nd, I promised that I would return to the subject of Fair Share legislation. You will recall that Senate Majority Leader Mike Gronstal said this to Radio Iowa's Kay Henderson:
"If 'fair share' is so bad and it's going to make everybody exit a state that would adopt it, why the heck hasn't every business moved out of Minnesota, Wisconsin and Illinois and moved to Iowa, because they all have it?"
I could not disagree more with Mr. Gronstal. Remember, my profession is economic development, and I am on the front lines speaking with companies about doing business in Iowa. I'd like to think that I know a little something about economic development and the recruitment of companies to Iowa.
Companies correctly view Fair Share as pro-labor legislation which basically marginalizes Iowa's Right to Work laws. It's not so much that industries in Iowa would begin to close operations here if the proposed legislation passes. Rather, new companies looking for a permanent home will skip over Iowa should this legislation pass.
The bailout of the auto makers has exposed the stranglehold unions can place on an entire industry. Companies have watched this very closely. Labor contracts can build in excessive overhead, excessive pay, and pension obligations that a company cannot possibly meet.
Do we want to be viewed as a state friendly towards business or towards labor?
Cool Link of the Day
Read Iowa's Right to Work Laws as they are on the books.
County Republicans Concerned About Iowa Budget
Thursday, January 8, 2009
Can we spend our way out of a deficit? I continue to be enthusiastic about the future of the Republican Party of Iowa. A 2nd district county central committee met this evening, and they had a good group of folks show up. Rep. Tom Sands was in attendance, and he gave a grim, but accurate view of the state's budget.
Many people are worried. Nine digit budget deficits don't fix themselves. To balance the budget, the state must either cut expenses or increase revenue. Some say the state can raid savings accounts or lease the lottery, but neither of these solutions really fixes the problem.
The problem is that we are spending too much.
Cool Link of the Day
Gronstal says no. No, really, he says no.
Republican Activism Alive and Well in Lee County
Monday, January 5, 2009
Central Committee Preparing for Victory in '10 I had the pleasure of attending the Lee County Central Committee meeting this evening in Donnellson. One certainly leaves Lee County with a renewed sense of optimism. Although registered Democrats outnumber Republicans by nearly 7,000, this central committee knows that it can make inroads among the nearly 8,000 independents.
They do some of the right things:
-They actively recruit candidates (even in tough districts).
-They end an election season with bills paid and some money in the bank.
-After an election, they analyze the results and record what went well and what didn't go as planned.
-They encourage newbies to take leadership positions and to get more actively involved.
I have to give a shout out to my good friend Don Lucas who is now the county chair. There should also be mention of Matt Green, Catherine Camfield, Alex Kloster, and Susan Dyer for taking on newly elected positions within the committee.
Kudos to Lee County. Keep up the good work!
Cool Link of the Day
Check out this site I just found that tracks spending by the Iowa Legislature. You can look up your representative and see how much spending they voted for in the last session.
Big Labor's Influence on Iowa Elections: Example 1B
Friday, January 2, 2009
Gronstal Says 'Fair Share' is Fair Just hours after my post on Monday, Senate Majority Leader Mike Gronstal said this to Radio Iowa's Kay Henderson:
"If 'fair share' is so bad and it's going to make everybody exit a state that would adopt it, why the heck hasn't every business moved out of Minnesota, Wisconsin and Illinois and moved to Iowa, because they all have it?"
Perhaps the $100,000 his campaign received in 2008 from JUST ONE union has helped shape his opinion.
Fair Share as it is called forces non-union employees to pay a bargaining fee for the master contract negotiation. Labor views this as a fee for service. In their eyes, the non-union employee is free-loading on the union contract without paying for representation.
My wife is a teacher and does not belong to the teacher's union. Because the school district is unionized, she MUST operate under the master contract that the union negotiates. There is no other option for her. The union will say that my wife gets paid more because of their representation. Perhaps that is true, but there are other issues with operating under a master contract. The master contract schedules pay according to education and years of service. That's it. Good teachers make the same as bad teachers.
In the private sector, pay is determined by a number of factors including performance. Should we not expect the same thing from the public sector?
I will have an additional post further disagreeing with Gronstal that fair share is no big deal.
Cool Link of the Day
For those of you with New Year's resolutions, check out what your ideal weight should be.