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Iowans for Tax Relief: Don't raise state taxes; cut over-the-top spending
1/20/2009

Don't raise state taxes; cut over-the-top spending

By Ed Failor, Jr. President of Iowans for Tax Relief

While discussing the need to crack down on employers who abuse contract-labor laws, Gov. Chet Culver was recently quoted in the Register: "Any way that the state can generate revenue, I'm for."

That is possibly 2008's most outrageous statement. "Generating revenue" means the governor wants to dig further into your wallet to take more of your hard-earned money.

Fiscal restraint doesn't seem to be in Governor Culver's vocabulary.

Saying state government needs more revenue is like someone who needs to lose weight for health reasons saying, "Any way I can get more Snickers candy bars, I'm for." The problem isn't too little revenue; Iowans pay more than $6 billion in sales, income and other taxes to state government. The problem is out-of-control government spending and budgets.

Bad economic times continue to make the headlines, but the real story should be about the opportunity before our Legislature and governor - an opportunity to trim the excess, over-the-top, big-ticket items that haven't helped Iowa prosper.

The Legislature should not follow the governor's lead to look for any possible way to generate revenue. That's a slick way of saying, "I want to raise your taxes." Politicians often find trendy buzzwords to disguise their actions to make them sound palatable. Iowans are smart people and know if government takes more, Iowans will have less. The out-of-control budgets of 2007 and 2008 are not sustainable, and our slowing economy is making that more obvious.

Iowans don't have to look far to see how private-sector businesses are dealing with a slowing economy, including layoffs, reduced hours and other internal budget reductions. The state needs to follow that example; now is not the time to raise taxes and grow government.

Most Iowa families this year are going without pay raises, and in some cases without jobs, yet state government remains bloated. Culver issued an across-the-board cut of 1.5 percent, an inadequate public gesture, not a solution. Iowans have been set up for a tax increase, more likely than not, a big tax increase. State government has been spending more than it has been taking in and has created a spending gap in the ballpark of $650 million. The governor's across-the-board reduction cuts only $90 million, which leaves a $560 million budget hole.

The budget mess needs to be cleaned up, and a quick fix will not work. Some lawmakers will choose to take the quick way out by suggesting the elimination of federal deductibility. Federal deductibility allows you to fully deduct all of the tax payments you have made to the federal government on your Iowa income-tax return. If politicians take away this right, you will pay Iowa income tax on money that was withheld from your paycheck. You will be taxed by Iowa politicians on money you never had in your hands. Paying a tax on a tax is simply not fair.

Some lawmakers may argue that eliminating federal deductibility is "reform." Tax increases are not reform, and tax increases are not the solution to a spending problem.

Our state government alone is collecting more than $6 billion of our tax money. That's enough to sustain state government activities. I suggest the governor and the Legislature make a New Year's resolution for 2009: to budget like Iowa families, to do more with less and tighten their belt. State leaders should not grow state government and further burden Iowans with irresponsible tax increases.

Iowans cannot afford government taking more out of their paychecks or their family budgets. Iowans need government to live within its means.


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