McKibben Comments

FOR IMMEDIATE RELEASE Contact: Kimberly Steenhoek

Thursday, Jan. 11, 2007 (515) 281-6571

McKibben: We Need to Build on Efforts to Reduce Iowans’ Tax Burden

DES MOINES – Sen. Larry McKibben (R-Marshalltown) today made the following comments at the opening Senate Ways and Means Committee meeting of the 82^nd General Assembly:

Today – after years of declining revenues – the surplus is the biggest Iowa has seen since 1999. And, it’s thanks in part to legislative Republicans’ unwavering commitment to lower taxes and responsible budgeting.

Now that Iowa’s working families are providing more economic growth, I want to ensure we continue to let this hard work be rewarded with more money in the family budget.

Republicans have worked to provide significant tax relief designed to lower the tax burden for Iowa’s families and business owners. Over the last ten years, Republicans took the lead in passing a 10% across-the-board reduction of the Iowa individual income tax, eliminated the inheritance tax for children, grandchildren, and lineal descendants, phased-out the sales tax on utilities, enhanced the pension tax exemption, enhanced the research activities tax credit and provided an insurance premium tax reduction.

However, despite these efforts, Iowa is still considered a high tax state. We must reform our tax structure to lessen the tax burden on Iowa’s families and business owners.

Unfortunately, we hear that Democrats and the Governor are looking to raise taxes on Iowans in order to spend more and grow government.

I am not willing to consider tax increases. Every time we increase taxes in the State of Iowa, we lose good jobs.

Instead, we need to continue building on our efforts to reduce Iowans’ tax burden, and return any surplus to working families.

During the last session, for example, we cut taxes for Iowa’s seniors. A lot of seniors were leaving our state upon retirement for lower-tax states such as Florida and Texas. Last session we enacted bipartisan changes to our tax code to keep our retirees in Iowa. But, they won’t stay here if we turn around and raise their taxes.

The Tax Foundation, a nonpartisan research organization, published the 2007 State Business Tax Climate Index. Iowa was ranked 43^rd, one of the ten worst states in the nation. Yet, in recent news reports the chair of this committee has stated that he believes the tax burden on Iowa’s businesses is within acceptable levels - - that Iowa is in a competitive place in terms of our tax code - - that businesses aren’t overtaxed.

My question to my colleague is.…have you talked to your businesses lately?

We have a high and regressive tax system in Iowa – one that drives business and industry and hence jobs out of the state. If discussions of tax increases continue, companies aren’t going to look at expanding or staying in Iowa. If we raise taxes the only help we can provide is turning off the lights when they leave.

We can begin by joining with Governor-elect Culver to help Iowa’s businesses by enacting real property tax reform and reduction. We need to accomplish this now while we are in a non-election year and the state has a budget surplus.

Let’s remember whose money we are dealing with here – it is the money earned by hardworking Iowans.

We must return any surplus to the taxpayer and enact true tax reforms that result in a lower overall tax burden for Iowa’s working families and business owners. It is only this type of comprehensive tax reform that will truly put Iowa on the path of long-term economic growth.

###