Iowa’s Disappearing Corporate Tax Base

Iowa’s Disappearing Corporate Tax Base

New Report: Shrinking Corporate Tax Base is Wreaking Havoc on Iowa’s Budget

 

Corporate taxes make up just five percent of state revenues; individuals left to pick up the slack

 

A new report by National People’s Action and the Center for Effective Government co-authored by Iowa Citizens for Community Improvement Action Fund (Iowa CCI Action Fund) finds that a “Robin Hood” tax on Wall Street speculation and closing other corporate tax loopholes could generate significant new revenue for the state of Iowa, which relies on federal money for about one third of its annual budget.  Iowa has a 12.7 percent poverty rate but corporate tax revenue only accounts for 5.4 percent of the state budget.

The report, “The Disappearing Corporate Tax Base: How to Reclaim Lost Tax Revenue to Rebuild State Budgets: Iowa Edition”, states that federal funding for state budgets dropped following the 2008 recession and that the reduced support for states coincided with a longer time period of corporate tax receipts falling as new tax cuts and loopholes were carved out every year at all levels of government.

To make matters worse, Iowa already loses out on $112 million in potential revenue every year because out of state corporations doing business in Iowa do not pay the same kinds of state taxes that Iowa’s neighboring states charge.

The report recommends taxing Wall Street speculation at the federal level and combined corporate reporting at the state level to raise new revenue to increase funding for education, infrastructure, health-care, and jobs.

“Governor Branstad and state policymakers are risking Iowa’s budget surplus on expensive and unnecessary corporate property tax cuts for giant out of state companies when we should be cracking down on corporate tax dodgers and fully funding good government to deliver the vital public services everyday, hardworking Iowans depend on,” said Adam Mason, Iowa CCI Action Fund’s Statewide Policy Organizing Director.

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