Posted by 04 June 2018
The Democrats running for governor in Iowa have a lot of differences, but there is one thing they agree on – limiting the tax credits that go to businesses.
Like many states, Iowa offers a variety of tax credit programs that benefit business owners. These programs give a credit against taxes paid if businesses meet certain criteria. In some programs, the tax credits paid by the state can exceed the amount of taxes paid by the business.
These programs are touted as an economic development tool. Their supporters say that they are necessary to bring companies to the state. They are also used as a way to give incentives for companies that meet goals favored by politicians, such as pay certain wage rates.
Critics say that tax credits are merely corporate welfare under another name. The programs, these observers point out, are really state money being paid to businesses. They take money that could go to other services and instead give it to private corporations.
The candidates seeking the Democratic gubernatorial nomination largely focus on that last point. They propose ending some or all of these tax credit programs and using the new revenue for education and other public services.
While all the candidates support reforming the state’s tax credit programs, one of them – Fred Hubbell – served on the economic development board that allocated tax credits. His opponents attacked him for his work in that position, while Hubbell said that he tried to focus tax credits on progressive goals.
The state’s primary election is June 5.
Do you support tax credit programs that provide funds for private businesses? Are these programs a necessary way to create jobs in a state or are they corporate welfare that diverts tax money from public services to wealthy business owners?