The Muscatine Rotary Club hosted Ron Corbett, the founder of Engage Iowa. Corbett, who is also the Mayor of Cedar Rapids, presented a case study on two topics: Iowa’s state income tax and Iowa’s water quality.
Corbett discussed what his think tank’s findings were on Iowa’s ability to be competitive in the national and global job market. Engage Iowa has deduced that in Iowa, the complex state income tax structure is a detriment to job creation and to attracting quality employees to the state. Iowa has a complex tax system for state income tax, including nine tax brackets. The highest marginal tax rate being 8.98% for individuals or couples earning over $69,255 annually. What this has created is an environment where states like South Dakota, which has no state income tax, or Illinois with a flat 3.75% state income tax are able to out compete Iowa for workers. Corbett feels this gives South Dakota a competitive advantage over Iowa in attracting a workforce. A couple earning $70,000 actually makes less money for the same jobs in Muscatine than in Sioux Falls, South Dakota. Engage Iowa feels that, in order to bolster Iowa’s ability to attract companies and a quality workforce, Iowa should simplify the tax code, eliminate all deductions for state income tax, and settle on a 3% flat state income tax rate. Engage Iowa also feels through their study that raising the consumption tax or sales tax by 1% would provide adequate revenue for the state to fund programs. In Iowa, necessities like food and utilities are not subject to consumption tax. Muscatine County Attorney and Rotarian Alan Ostegren said, “I am interested in new ideas. I think this is an interesting study.”
The second part of Corbett’s presentation was on clean water. The think tank is looking into ways that our farming community can have quality yield while maintaining quality water. Corbett told the Voice of Muscatine, “We have to gain a competitive economic advantage over our neighboring states and other states in the country. We also need to protect our natural resources for our current and future generations, while supporting our agricultural community.”