Branstad to sign off on Field of Dreams Giveaway, 185% increase in Earned Income Credit?

April 6th, 2012 by Joe Kristan

The Branstad administration isn’t giving much reason for hope on Iowa tax policy this week.  Having already embraced even more special breaks for ESOPs and “anchor manufacturers” in Iowa’s byzantine income tax, today’s news indicates that he has more blows in store to sound tax policy.

First, from ‘inclined’ to sign bill for ‘Field of Dreams’” This bill allows a planned sports complex on the “Field of Dreams” film site to keep sales tax it collects for itself.  The Newton race track has a similar deal.  A legislator who voted against the bill pointed out the obvious:

That feels too much like “picking winners and losers,” said Sen. Jack Whitver, R-Ankeny, and suggests to other development projects or business ventures that lobbying lawmakers is the key to securing lucrative tax breaks.

“I just don’t like the fact these groups have to hire a lobbyist, come down here and basically win us over on their project,” he said.

Lobby it, and they will come.

Meanwhile, there’s this from The Des Moines Register:Branstad would sign earned income tax credit to get property tax deal.”  Iowa’s earned income credit is now 7% of the fraud-ridden federal credit.  Iowa Senate leaders propose to raise this to 20%.  This credit is touted as a tax break, but as it is paid as cash if it exceeds income tax, it is really a cash welfare program.  It phases out as income increases, imposing tremendously-high marginal rates on the working poor — punishing them for improving their lot.

The Governor’s party is two votes away from having a majority in the Iowa Senate.  He could try to sell his policies hard enough to win those two seats and pass his (needed) property tax reforms without a huge welfare expenditure.  That doesn’t seem to be part of the plan, and Iowa drifts ever further from sound tax policy.


Tags: , , , , ,