Iowans for Tax Relief (ITR) sent an email this morning that I wanted to share some content from. The Iowa Legislature is expected to tackle tax reform during this upcoming session.
ITR lays out five principles that they believe Iowa’s tax code should adhere to:
- Fair: Iowa’s tax code should be fair and not favor one group of taxpayers at the expense of another.
- Competitive: Iowa should have lower tax rates rather than the current high tax rates that make our state less competitive with our neighbors. The Iowa tax code should encourage, rather than hinder, economic growth.
- Transparent: The Iowa tax code is complex and needs to be simplified. A tax structure that is simpler and easier to understand will be friendlier to taxpayers. Taxpayers in Iowa deserve transparency and accountability when it comes to tax credits and incentives, too.
- Limited: Iowa’s tax code should be limited, that is, taxes should only be collected to finance the essential functions of state government. It is immoral for government to believe that they have an unlimited claim to the hard-earned income of individuals and businesses.
- Protective of Freedom: Iowa’s tax code should promote freedom. Taxes should not be used for social engineering. Iowa should not create new taxes or substitute one tax for another.
With the budget challenges, Iowa faces it is uncertain what kind of tax reform plan the Iowa Legislature will end up adopting. With the current make-up of the Iowa Legislature something on tax reform should be able to be done, but whether it will encompass all five of these principles will remain to be seen. They do provide some good guideposts that I hope legislators consider when writing their bills.
Iowans for Tax Relief points out that a sound tax reform plan will eventually remedy the revenue problem (more like a spending problem) the state government currently faces.
“A tax code that follows these principles while reducing the tax burden on Iowans will allow everyone to keep more of their hard-earned dollars. This will encourage economic growth and boost additional investment, ultimately providing more revenue to address the priorities of state government,” they write.