With our neighboring states providing brutal competition in insane tax policy, Iowa shows that in this area, at least, we can hold our own. Iowa has slipped one place, and now has the sixth worst business tax climate in the newly released 2007 State Business Tax Climate Index. Or, if you’re a “glass is half-full” sort, we’re the 45th best. We got there by edging out Nebraska, which rose two places to 43rd best.
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How do we do it?
Iowa can once again trace its poor overall ranking of 45th to its income tax rates on both personal and corporate income. They stand out as a warning to entrepreneurs. Individuals face an escalating series of tax rates that hit 8.98% over $58,500. Only a handful of states tax any source of income at such a high rate, and even those high-tax states usually apply it to much higher levels of income. Iowa