A liberal think tank says there’s no evidence cuts in Iowa’s income tax will spur business growth. Peter Fisher, a University of Iowa professor who’s part of the “Iowa Policy Project,” says individual income taxes are not a direct cost to the business, they’re a cost to their employees. Fisher says it’s only a factor if workers demand to be paid more or refuse to work in the state because of the income taxes. Fisher says Iowa’s income taxes are average when compared to the other 50 states, and below average when compared to other states in the Midwest. Fisher says a state’s income tax is just not a large factor in business decisions. Fisher says access to airports and Interstates, wage rates and utility costs are the things that really matter to businesses.Fisher says a small difference in the income taxes paid by employees is just a tiny factor that’s overweighed by those other considerations. A key Republican Senator disputes Fisher’s conclusions.Senator Larry McKibben of Marshalltown, the chairman of the Senate’s tax-writing committee, says Fisher’s “just wrong.” McKibben says Iowa’s income taxes are not average. With nine brackets and a top rate of nearly nine percent, McKibben says “high-end” wage earners make the calculation and avoid Iowa because of that high rate.McKibben and other legislators are still noodling around ideas for re-working Iowa’s income tax, but no deals have been struck.
