The best way to grow Iowa’s middle class is to help Main Street businesses and other employers grow.
I’m working with a couple of colleagues on a commercial property tax cut aimed at doing just that. This “Main Street Tax Cut” is an expanded version of the only commercial property tax cut posposal to pass a chamber of the Legislature with overwhelming bipartisan support.
Commercial property owners currently pay taxes on 100 percent of the assessed value of their property. That’s about twice what residential property owners pay.
The “Main Street Tax Cut” is a 40 percent commercial property tax cut for 80 percent of Iowa commercial properties.
Most of the benefit goes to our local small business owners, the biggest creators in Iowa communities. And the “Main Street Tax Cut” does it without increasing taxes on residential property owners or harming local schools and public services.
State dollars would be used to replace every property tax dollar that used to go to schools, local governments and community colleges. That means this plan does not force an increase in residential property taxes.
The “Main Street Tax Cut” compares favorably with Governor Branstad’s proposal, which is a 20 percent across-the-board cut in commercial property taxes.
The governor’s plan costs much more but provides less property tax relief to most Iowa commercial property owners. That’s because it pours tens of millions of dollars into the bank accounts of large, out-of-state corporations, i.e. $75 million to Walmart alone!
Under the “Main Street Tax Cut,” $50 million a year will go into a new Business Property Tax Relief Fund beginning July 1, 2014. The permanent, on-going appropriation will grow by $50 million each year that the state’s revenue increases by at least 4 percent.
Once a $250 million goal is reached the annual investment will be maintained.
Over the years, Iowa’s property tax system has become a serious barrier to creating jobs and bringing new businesses to Iowa. “Main Street Tax Cut” will lower that barrier.
My plan has unanimous support in the Senate Majority.
My guess is we shall pass the measure over to the House and see if they, too, feel that Main Street businesses are the foundation of Iowa’s economy.
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