Taxes - Iowa Chamber Alliance

Taxes

Iowa remains 40th for business climate in the Tax Foundation’s 2018 State Business Tax Climate Index. Complexity is a driving factor in Iowa’s poor ranking. Iowa also moved down a place this year in corporate income taxes, ranking 48th out of 50 in corporate income taxes.

Simply put, Iowa’s tax code is not competitive and puts Iowa businesses at a severe disadvantage.

There is significant opportunity in the 2018 legislative session for Iowa to improve its overly complex and burdensome tax structure. Meaningful tax reform must be bold, yet thoughtful and nuanced. It must maintain strong fiscal management of the taxpayer’s dollars, while being committed to real reform and relief for Iowa’s business taxpayers. In order to be positioned for the growth tax reform will bring, Iowa must maintain its forward thinking economic development programs that grow and enhance the state’s economy.

The following principles will guide the Iowa Chamber Alliance in its analysis of and advocacy for 2018 tax reform proposals:

  1. Competitive. Tax reform ought to be geared to make Iowa more competitive: fewer brackets, limited exemptions, effective credits, and lower rates for personal, small business, and corporate income taxes.
  2. Invest in Growth. Programs, credits, and incentives should be focused on spurring economic growth across diverse industry categories. These incentives have a demonstrated return on investment and need to be encouraged and treated differently than other tax credits.
  3. Simple. Iowa’s tax code is unnecessarily complex and any changes must make it simpler. Iowa’s tax code must be understandable to taxpayers and attractive to outside investment.
  4. Permanent, Predictable and Certain. A well-crafted tax policy will have permanence, avoid short-term changes, and ensure the predictability of Iowa’s tax landscape so businesses can make long-term investments in Iowa. Any changes ought to require minimal interpretation by the Department of Revenue. Clarity and certainty need to be in the Code.
  5. Fair and Responsible. Tax policy should be equitable and not favor one classification of business over another. Any changes to the tax code should not undermine the fiscal health of the state.
  6. Transition Path. How we transition from the tax code of today to the tax code of tomorrow is equally as important as the reform itself.
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