Iowa’s Governor Branstad seems to be serious about this tax reform thing. From WCFCourier.com:
Gov. Terry Branstad cautioned lawmakers against finding ways to spend the state’s projected budget surplus, while calling Monday for across-the-board tax changes.
Speaking at a Statehouse news conference, Branstad said he’s working on a tax reform proposal to “dramatically” cut personal, corporate and property taxes in the state.
Specifics would be announced later, he said, possibly when he delivers the Condition of the State speech next year.
Iowa’s basic tax system is little changed structurally from the one we had when the Governor took office the first time in 1983. Substituting rate schedules, you could almost prepare a 2011 Iowa 1040 on 1984 forms. You wouldn’t even have to substitute the rate schedule to prepare a corporate return; Iowa’s highest-in-the-nation corporation rate is unchanged since 1981.
While the basic structure is unchanged, the system has become infested with special interest deductions and credits over the years — a process that started under Governor Branstad and that got out of control during the 12-year interregnum between his fourth and fifth terms.
In some ways tax reform would be a reversal of course for the Governor. He has continued the process of complicating the Iowa tax law with special breaks since his return, enacting new carve-outs for ESOPs and proposing special rules for “anchor manufacturers” while making a massive tax credit allocation to the new Southeast Iowa fertilizer plant.
But Governor Branstad also has some history as a tax cutter. He signed a big rate cut that took effect in 1987, reducing Iowa’s highest individual tax rate from an insane 13% to a still painful 9.98%. Yet that cut left the basic Iowa structure — including the individual deduction for federal income taxes — untouched. When he made the huge allocation to the Orascom plant, he was at least embarrassed enough to say that it was an argument for corporate tax reform.
So will the Governor go big? Will he embrace important elements of the Tax Update’s Quick and Dirty Iowa Tax Teform Plan, which would eliminate Iowa’s corporation tax and cut individual rates to around 4%, while sweeping away the federal income tax deduction and all special carve-outs? Stay tuned.
Brutal Assault on Reason Watch:
What the Joint Tax Committee Really Said About Tax Reform (Howard Gleckman, TaxVox)
Because Doug Shulman’s IRS would rather spend its resources licensing preparers than giving tax refunds to struggling businesses: DELAYS IN PROCESSING NET OPERATING LOSS CASES RESULTED IN MILLIONS OF DOLLARS IN UNNECESSARY INTEREST PAYMENTS (TIGTA report)
Anthony Nitti, Can A Shareholder Own Corporate Goodwill?
Jana Luttenegger, Basics of Estate Tax and Gift Tax (Davis Brown Tax Law Blog)
Peter Reilly, Don’t Freak Out If You Hear Your Trust Is Defective
Trish McIntire, 98 Days and Counting. 98 days for 2012 tax planning.
News you can use: I GIVE UP! (Robert D. Flach) “The members of Congress are idiots. More so now than ever before in our history.”
The Critical Question: When it comes to auditing, just what does familiarity breed? (Nanette Byrnes)
Paul Neiffer, Another Tax Season Bites The Dust
Mothers, hide your children. Tax Professionals To Be Released Into the Wild Later Today (Going Concern). Oops, too late, that happened yesterday.
Oh, and happy Bosses Day.