Tax cuts help Iowa’s competitiveness; trans could hurt
Iowa will be a much more attractive place for out-of-state businesses and workers looking to relocate due to recently enacted tax cuts, according to the Iowa Business Council, a group that represents 22 of the country’s top employers. the state.
The state previously had the distinction of the nation’s highest nominal tax rate of 12% – which applied for 30 years to businesses with revenues over $250,000 before a recent reduction to 9.8% in 2021. The classification does not take into account tax credits and exemptions. A new single rate of 5.5% for all businesses should be phased in over several years, depending on state tax revenues.
Personal income tax rates will also drop from a maximum of 6% to a single rate of 3.9%.
“We think it’s a huge improvement from a competitiveness standpoint to make Iowa much more attractive as a place to potentially relocate businesses (and) as a way to bring new talent into the world. ‘State with competitive wages and a competitive personal tax policy,’ Tim said. Yaggi, chief executive of Pella Corporation and chairman of the board, who has long advocated for reform of the state’s tax code. “Really excited about this.”
The corporate tax rate cut will put Iowa among the lowest rates in the nation after being among the highest for decades. The tax rate hasn’t been this low in the state since 1966, when it was 4%, according to the Iowa Department of Revenue.
Yaggi’s remarks on Thursday related to the council’s recently released annual report on Iowa’s competitiveness with other states based on five categories of metrics: economic growth, education and workforce, governance, health and well-being, demographics and diversity.
Overall, the state has received strong ratings, but one of the council’s main concerns is a longstanding worker shortage that has been exacerbated by the coronavirus pandemic. The state’s workforce is now 76,000 fewer people than it was just before the pandemic, said Joe Murphy, the council’s executive director.
“We need to make our state the most welcoming and inclusive place possible for all Iowans and hopefully new Iowans who want to come to our state,” Murphy said Thursday.
New legislation that Gov. Kim Reynolds signed into law later in the day – which prohibits transgender girls and women from competing against other girls and women in K-12 school and college sports – n won’t help the state appear more welcoming, Murphy and Yaggi said. .
“We need people who can see Iowa as an opportunity, but once they get here, they feel included, they feel welcome, they feel they belong,” Yaggi said.
Workforce diversity is a common problem. Yaggi said he was talking with executives from other major Iowa companies. He said Pella has recently sought to make his jobs more attractive to employees who don’t speak English. The company, which manufactures high-quality doors and windows, translated all of its assembly instructions into Spanish and hired bilingual managers.
The lack of available housing and child care are also permanent obstacles to attracting new workers.
The pandemic has led to a substantial increase in the number of people working from home, which has been difficult for employers to navigate, Yaggi said, as it can disrupt a traditional work culture that relies on face-to-face interaction. face and because it has increased competition. for workers.
Some have heralded working from home as a way to boost populations in rural Iowa, where well-paying jobs may be scarce, but the same phenomenon may be happening nationally.
“It’s attractive to live in Iowa, but maybe work for a company that’s in a high-cost area,” Yaggi said. “It works both ways. I think it’s an opportunity, but at the same time it’s a threat.
The board’s annual report — the 2022 Iowa Competitive Scorecard — gave the state its highest marks for education, particularly for its percentage of people who continue their education after high school. Iowa also ranks in the top half of states for 4th-grade reading proficiency and 8th-grade math proficiency, which the board says “are leading indicators of future success.”
The state’s worst performance was in health and welfare. Iowa ranked 43rd in the nation for obesity rates. Her saving grace in the category was comprehensive health insurance coverage, for which she placed sixth.
The report is meant to be a guide for lawmakers, businesses and community leaders to help them improve the state’s business climate, Murphy said.
Board members include representatives from the following companies: Alliant Energy, Casey’s General Store, Collins Aerospace, Corteva Agriscience, Deere & Company, Fareway Stores, HNI Corporation, Hy-Vee, Iowa Bankers Association, Kent Corporation, MercyOne, Meredith Corporation, MidAmerican Energy Company, Pella Corporation, Director, Ruan Transportation Management Systems, The Weitz Company, UnityPoint Health, University of Iowa Health Care, Vermeer Corporation, Wellmark Blue Cross and Blue Shield of Iowa, and Wells Enterprises.
Iowa Capital Dispatch is part of States Newsroom, a grant-supported network of news outlets and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Managing Editor Kathie Obradovich with any questions: firstname.lastname@example.org. Follow Iowa Capital Dispatch on Facebook and Twitter.
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