Most gamblers would not frequent a casino if they knew they would win only 30 percent of the time, permitting the house to rack in 70 percent of their bets. Iowa’s Economic Development Authority is like a casino that’s gone amok and is purposely giving money to companies that aren’t accountable to the taxpayers.
Iowa’s taxpayers are being hoodwinked by the EDA.
Iowa’s EDA has handed out more than $51 million to 265 corporations in a program called the Research Activities Tax Credit. Fifty-five peer-reviewed studies have addressed the impact of targeted tax incentives. The results are not encouraging. More than 70 percent of the studies found incentives either did not substantially contribute to economic performance or the handout produced mixed results.
Corporate incentives have a lousy record of boosting economic growth.
Eighty-two percent ($41 million) of the $51 million Iowa passes out goes to large companies. Knowing that 97 percent of Iowa employers are classified as small business, does those large-company giveaway make sense and match our values?
Sixty percent ($31 million) of the $51 million goes to companies that pay no Iowa income tax. Aren’t you thrilled to know you are supporting companies that pay no Iowa income tax and make a profit on your dime?
The RATC welfare program is to be used by companies to conduct research. My 50 years of studying and practicing marketing says companies have no choice but to do research to stay competitive. So, if Iowa did not give away $51 million, would Rockwell Collins (receives $11.7 million), Deere & Co. ($9.4 million), DuPont ($6.8 million), John Deere Construction & Forestry ($3 million), Monsanto ($1.4 million), Bridgestone ($1.4 million), CNH ($1.2 million), HNI ($1.2 million), Vermeer ($1.1 million), etc., cease their research endeavors? No.
Do you think if Iowa shut down the RATC entitlement program Rockwell Collins, John Deere, DuPont and the remaining 262 companies would move to another state? No.
Companies that receive the research endowment do not have to establish the research they supposedly conduct benefits the people of Iowa. There is little to no accountability. State, county and city employees are held accountable. Why aren’t RATC recipients? Something is wrong here.
Two years ago our legislators and governor agreed to slash the state budget by $260 million and cut commercial property taxable assessments, reduce apartment building taxes, limit the amount residential and agricultural property values can grow and provide a property tax credit for business owners.
Add to this the recent $46 million manufacturing tax reduction decision made by the Department of Revenue and Gov. Terry Branstad. Taxpayers will be the ones who will see an increase in property taxes, let’s say by about $306 million. Enough is enough.
The Legislature must re-examine tax breaks this session and resolve this waste of the taxpayer’s money. Contact your senator, representative and Branstad and request they revamp Iowa’s giveaway programs. If the legislators don’t address this debacle, we need to hold them accountable and replace all of them, regardless of party affiliation, in November.
Maybe the taxpayers would be better off sending Iowa’s Economic Development Authority personnel to a casino with our hard-earned $51 million and play the roulette wheel. Put it on black. It might have a higher return than Iowa being in the red.