The Chris Moeller Archives

The VH1 Tax

Iowa Senate Republicans dropped a bombshell Monday-- an economic growth proposal that would eliminate state income taxes for all residents under 30 years old. Wowsa. The average yearly tax savings would run about $600 for each person 29 and younger.
Their timing is exquisite. I have about nine weeks remaining before my 30th birthday. Maybe they could twist the knife a little more by signing the plan into law on the actual anniversary of my birth April 2nd, near the close of the session.
Aside from its timing, this is a terrible idea. First of all, everyone should be paying taxes on principle. The twenty-somethings might even be surprised to find themselves marginalized after the law goes into effect. Without taxation, are you still entitled to representation in government? Secondly, it fails to address the real issues that young people consider when they choose their home-- quality of life, cultural and recreational diversity, and employment opportunity. Six hundred dollars a year can be a rather insignificant amount if other parts of the country have more to offer in terms of employment and excitement.
What bothers me most about it is that it's such short term thinking. The "gentlemen farmers" of the state legislature have rarely been willing to actually invest in the state's future, and we're seeing the effects of their laissez fair approach-- dead or dying Main Streets, urban decay, and one of the country's most rapid population declines.
I was in Burlington, VT this summer, and I can tell you that that town has got it going on. Small business thrives there because the nation's soulless corporate intruders have been well regulated. Young people crowd the sidewalks, relaxing in unique coffee shops and record stores. They ride their bikes all over town thanks to thoughtful zoning plans and an extensive trail system.
An elimination of income taxes on the young people of Iowa might delay the autopsy on our small communities for a decade or two, but the small towns aren't coming back. You killed them when you killed the family farm. After several more years have passed, those communities won't be able to support their hospitals and schools, and that will be that. The future of Iowa is its cities, and the cities need more financial investment. No more tax incentives for out-of-state corporate behemoths that threaten our enterprising small businesses and destroy our distinctiveness.
If you want to give somebody a tax break, make it progressive. Eliminate taxes on the first $20,000 of annual income for all Iowans. It would provide comparable relief for young people still getting started and paying off student loans, and shift the tax burden to the wealthy. Free day care would help, too.

posted by CM @ 9:25 PM