Americans for Tax Reform President Grover Norquist set the tax goal for Republicans, when he made this memorable quote. “I just want to shrink government down to the size where we can drown it in the bathtub.”
The Iowa Republican Party is lining up their allies, including the Koch Brothers, to push an Iowa tax scam that potentially can do just that. Koch Brothers have spent $10 million promoting the federal Republican tax cut bill. The House and Senate both passed separate versions and now it must go to conference for completion. Following the successful passage of the two versions of the federal tax scam bill, Iowa Republicans are deviously scheming to duplicate that catastrophe with an Iowa tax scam of their own. Most GOP legislators are disguising their radical Iowa tax cut plans by using the same ambiguous language as they used to describe the federal tax bill. They are proposing to masquerade extreme state tax cuts as tax “reform.”
However, Senate majority leader Bill Dix is much more audacious in his tax-slashing goals. Speaking before the Iowa Chamber Alliance this week, Dix talked about cutting both Iowa corporate and personal income taxes. He suggested Iowans need tax relief rather than reform since reform means “we might simply move the chairs around on the deck.” You can imagine that the chairs he refers to represent current state programs. The chairs represent funding for things like education, healthcare, environmental preservation and myriad other services Iowans depend upon. Translating Dix’s language, tax reform means setting spending priorities while tax relief means slashing or eliminating programs.
If you have any doubts, he made it painfully clear by using South Dakota tax code as his model. South Dakota has a 4% sales tax and no personal income tax or corporate tax. If the South Dakota model is his goal, it’s pretty obvious Dix doesn’t want to move these chairs around. He plans to throw the chairs overboard. He parroted the failed Republican trickle-down exaggerated claims of big potential growth by slashing taxes. The real goal is smaller government and his solution is tax revenue starvation. If you chop tax revenue, state government programs die from lack of funds.
“The environment that we are working in will get more competitive and we need to embrace that,” Dix said. “As a state we need to challenge ourselves in how we run state government.”
Dix is echoing the Norquist, Koch Brothers and Paul Ryan tax philosophy. They basically hate government and are determined to privatize it or destroy it. We saw this model for government destruction play out under Kansas Republican Governor Brownback in 2012. The Kansas legislature sliced state taxes, claiming that the trickle-down cuts would increase growth and pay for the reduced revenue. The result was state revenue dropping by $700 million which forced cuts to education, basic services and highway funding. Kansas were forced to reverse the cuts this year to prevent Kansas government from drowning in the bathtub.
Make no mistake, Iowa Republicans are planning a similar government drowning experiment for Iowa. Drew Klein, state director of the Koch Brothers’ front group Americans for Prosperity, started running the bath water last week in an op-ed in the Des Moines Register. He says the Iowa tax code is stifling growth and our Iowa corporate tax rate is way too high.
“Look around at the states where job growth is booming, and you’ll see that they are mostly low tax states (he points to the nine state with no income tax) that encourage businesses to relocate and expand with flatter, fairer and simpler tax laws that create an even playing field and incentivize growth,” said Klein.
Iowa Republicans have been emboldened by their slash-and-burn legislative agenda last year. They successfully killed the labor rights of 180,000 Iowa public sector workers, slashed education funding, raised tuition and stole back a minimum wage increase from thousands of Iowans in four counties. Dix has made his plan clear for the 2018 session. Drown or starve more public services with pie in the sky trickle-down tax cuts.
The Reynolds’ budget is already in crisis. She started the current fiscal year in the red and must pay back the money she borrowed to balance last year’s budget. Iowa isn’t able to fully fund education, health care or mental health needs currently.
Now Senator Dix is proposing to make additional reckless tax cuts and the Republican Party is likely to fall in line. Further tax cuts will push the Reynolds’ budget further into the red and accelerate the deterioration of basic Iowa public services. Chasing the Kansas trickle-down tax cut fantasy will likely sink the Iowa state budget. Brace yourself, Reynolds has driven Iowa into a deep budget hole and Dix wants to keep on digging.
by Rick Smith