Today is the start of a busy week. Whether you’re spending this week at the office, on the road, or hosting family and friends at your place, we hope you will be able to enjoy the Christmas holiday. Since you might be getting pulled in a lot of directions, we’ll keep our takes short and to the point today. But don’t worry, if you want to take a deeper dive into any of these items- school choice, income taxes, economic freedom, and regulation- we’ve got you covered; just click on the links for the complete articles.
It’s natural to assume that allowing parents to choose the school (public or private) that best fits the needs of their student is a good thing, and that it’s even better when that child’s share of educational funding can follow them. Marty Lueken of EdChoice wrote about just those thoughts for the Wall Street Journal Opinion Page (subscription required):
“Whether it’s financial objections or philosophical ones, choice opponents are running out of reasons to object to these policies. As this legislative season shapes up to become a busier one than we typically see during an election year, state lawmakers have an opportunity to implement educational choice programs that put families first and save public dollars.”
Mr. Lueken also points to his own recently published research on the tax saving aspect of school choice.
The good news is Iowa’s recent tax cuts are working. The Tax Foundation has released the 2022 State Business Tax Climate Index and for the second year in a row, Iowa has moved up two spots. Out of all 50 states, Iowa is now ranked 38 after landing at 42 in 2020’s rankings.
The better news is more cuts should be on the way. The Revenue Estimating Conference (REC), which is tasked with estimating revenue for the State of Iowa, met last week and continued to project healthy revenues for both Fiscal Years 2022 and 2023.
Governor Reynolds and Republican legislative leaders have both said that income tax reform will be a priority for the 2022 legislative session.
“We’re focused on the individual income tax rate in the Senate. We have been for five years. That’s where we’re seeing a lot of progress. That’s where we’re seeing a lot of economic growth because the individual income tax rate not only affects every individual person — every single taxpayer, but it also affects most of the businesses in this state,” noted Senate Majority Leader Jack Whitver.
Whitver’s colleague across the Capitol Rotunda, Speaker of the House Pat Grassley, offered similar comments, “This overcollection is the people of Iowa’s money, and they deserve it back. Particularly as we are facing rising levels of inflation from the Biden economy, we must ensure Iowans keep more of their hard-earned money. Iowa House Republicans look forward to addressing this issue and finding the most effective way to lower taxes and return this money to Iowa taxpayers.”
Growing Iowa’s population and expanding the workforce will not be easy. However, the solution will not be found in expanding tax credits, incentive programs, or other government mandated solutions, but rather through expanding economic freedom. Hundreds of independent studies have produced overwhelming evidence that higher levels of economic freedom are associated with more opportunity, more prosperity, greater economic growth, more investment, and more jobs.
The Fraser Institute’s 2021 Economic Freedom of North America report measures economic freedom among the states and this year Iowa landed roughly in the middle of those rankings, coming in at 30. Do you want to know what was judged to be the biggest drag on Iowa’s overall economic freedom? It was taxes.
Regulations are a forgotten tax. Because their impacts aren’t captured in any state budget, lawmakers don’t devote as much attention to them as tax and spending decisions. Eliminating burdensome regulations that hinder growth is (almost) as important as controlling spending and easing taxes. And in comparison to its neighbors, Iowa has an enormous volume of regulations.
It is time to ask why Iowa has so many regulations and begin the process of eliminating the ones that don’t make sense. Unshackling businesses from unnecessary requirements will create more economic growth and make Iowa more competitive with its neighbors.
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