Look out, Iowa. This may be a bumpy ride. On March 1, Republican Governor Kim Reynolds signed into law the new flat tax rate for Iowa, 3.9%. According to my research, right now Iowa is on the list of the 10 states with the highest income tax rate (8.53%). With this new law we will be among the lowest. Iowans were delighted; especially rich Iowans who will gain the most.
The majority Republicans did this without benefitting from history. In May, 2012, the Republican governor of Kansas, Sam Brownback, did much the same thing; but by 2017 spending on roads and education was slashed and their once thriving Kansas economy was in a shambles. Kansas had a 900 million dollar budget gap. They are still struggling to recover. Our 3.9% flat tax when fully phased in, is expected to reduce state revenues by $1.9 billion. Just sayin’.
Our Republican legislature is generous to the wealthy in other ways. According to the Iowa Department of Revenue, there is available to big businesses a Research Activities Tax Credit, and in their annual report for last year they listed the companies earning research activities tax credits over $500,000. If their research activities exceeded the taxpayer’s Iowa tax liability , Iowa gave them refunds. These are the companies that can apply a tax credit equal to 6.5 percent of their research activities:
Deere & Company, $11,394,443
Corteva, Inc and Subsidiaries, $5,874,741
EI du Pont de Nemours & Co, $2, 513,356
Poet Biorefining, LLC, $2,272,578
John Deere Construction , Forestry, $1,357,495
Elite Octane, LLC, $1,320,129
Vermeer Manufacturing Co., $1,289, 512
Bayer Corporation, $1,237,525
Syngenta Corporation, $1,190,546
Homeland Energy Solutions, LLC, 1,160,033
HNI Corporation, $1,109,281
Absolute Energy, LLC, $843,981
Skyworks Solutions, Inc., $805,576
Unity Technologies SF, $694,139
Emerson Electric Co., $682,499
Cargill, Inc. and Subsidiaries, $667,283
International Paper Company, $595,021
Quad County Corn Processors, $533,499
Total Earned: $36,240,947
Let’s take Deere & Company. They are eligible to claim a tax credit equal to 6.5% of its incremental research expenditures. According to my calculator, that amounts to $740,638.79 that they can take off their income tax. If their tax is less than that, Iowa “refunds” them the difference.
Why are we Iowa taxpayers paying for these big corporation’s research? Are we working family taxpayers being taken for a ride? I think it is time to stop this tax credit scam.
Be sure to ask your Republican legislators about all of this, and remember this when you vote.
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