Don’t Let a Bad Policy Idea Take Root

Believe it or not, the focus in the Iowa presidential caucus is starting to shift from the personalities of the candidates to their actual policies.  August delivered a plethora of campaign swings throughout Iowa including the State Fair, which provided a platform for candidates to discuss issues. The first…


A Safe Space for Innovation

A streamlined path to market leads to greater innovation, more economic growth, and lower prices for consumers. The concept of a regulatory sandbox has emerged as a popular way to promote innovation and experimentation while still operating within the confines of government oversight. A regulatory sandbox is essentially a controlled…

Property Taxes

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ITR Live Podcast

Tax Policy: Impacts and Implications – Federal and Local ITR Live: Conservative Iowa Politics

# Understanding the Impacts and Implications of Tax Policy: An In-depth Look In today's dynamic political landscape, the discourse surrounding tax policy and its impacts plays a pivotal role. This article takes a deep dive into the various facets of the tax policy debate including inheritance tax, tax codes, and the powers of local governments. ## A Glance at Inheritance Tax *Proposed Inheritance Tax Reforms*: A notion that has gained some interest is the idea of introducing a hefty inheritance tax. The motive behind such a proposal is to level the playing field among citizens and curtail the head start that some individuals receive due to familial wealth. As lofty as this idea seems, its practical implementation could pose dangerous and unforeseen ramifications. ## The Importance of Stepped-up Basis in Tax Codes Currently, when an asset is inherited in the United States, it is eligible for a stepped-up basis. The stepped-up basis is critical when calculating capital gains tax after the sale of an inherited asset. Primarily, it permits the beneficiary to adjust the initial asset value, used to compute the capital gains tax, to its value at inheritance rather than the original purchase value. This adjustment significantly reduces the taxable value if the asset has appreciated over time. This tax provision is particularly important to consider in the context of farm families. For families that have held farmland for several decades, selling the inherited land could lead to an enormous tax bill should the notion of stepped-up basis be omitted from the tax code. Conversely, the elimination of stepped-up basis could lead some families to feel forced into transactions they would have otherwise avoided. Such forced transactions may disrupt agricultural practices and the preservation of family-owned lands. ## The Role of Local Governments While federal government decisions often gained the limelight, the authority and influence of local governments should not be underestimated. Local governments have the power to approve and enforce fiscal decisions that can profoundly impact their residents, including changes to property taxes and state spending. Some local government officials argue that any intervention that aims to reduce their allocated funds would inevitably lead to cutbacks on essential services like public safety. Nevertheless, state legislators contend that such arguments usually amount to little more than alarmist rhetoric. # Tax Policy Transparency Transparency in tax policy is key for effective governance. Encouragingly, numerous legislators across the country recognize the importance of tax policy transparency in their jurisdictions. For example, the Governor of Oklahoma's proposed budget transparency measures aim to clearly communicate information about state spending to taxpayers. In conclusion, as consideration of tax policy continues to evolve, understanding these intricacies becomes increasingly significant. Tuning in regularly to the ongoing tax policy discussion allows for informed opinions and educated decisions. Both legislators and citizens alike can then work towards a tax policy that aids in economic growth, reduces inequality, and ensures fiscal responsibility.


About ITR Foundation

Let’s be honest, big government is big bureaucracy, and common sense tells us big bureaucracy is ineffective. That’s why ITR Foundation works to:

  • Research principled solutions
  • Educate Iowans about our solutions
  • Activate Iowans in support of our solutions

By applying the principles of limited government, free enterprise, and the rule of law to public policy, we can ensure all Iowans will have the opportunity to succeed.

Making a Difference

ITR Foundation set the policy groundwork for many recent taxpayer victories in Iowa:

  • A 3.9% flat individual income tax rate by 2026
  • Elimination of income taxes on retirement income
  • Elimination of inheritance tax
  • Creating a path to reduce corporate income tax to 5.5%
  • Phasing-out special tax incentives in the corporate tax code

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