Two of the four Republicans running for governor say it’s time to think about doing away with Iowa’s corporate income tax. State Representative Rod Roberts of Carroll says such a move could create an economic boom in the state.
“We need to do something that I believe is perhaps dramatic but also I think would send a strong signal to businesses that we’re serious about creating a very business-friendly environment here in Iowa,” Roberts says.
Roberts points to states like South Dakota which do not charge corporations an income tax.
“I know folks in Sioux City would be very interested in this proposal because they have to compete with a state that has a zero corporate income tax,” Roberts says. “And it’s extremely difficult for them not only to attract new businesses but to maintain the businesses that they have.”
Two other Republican gubernatorial candidates have suggested getting rid of Iowa’s personal income tax, but both Cedar Rapids businessman Christian Fong and State Senator Jerry Behn of Boone have dropped out of the race for governor. Roberts says he has no plans to exit the race.
“I intend to stay in the race,” Roberts says. “During almost five months now of campaign travel — meeting Iowans, listening to Iowans — I’ve determined that at this point in time I have every reason to stay in this race.”
The states of South Dakota, Nevada, Wyoming and Texas do not have a corporate income tax. Iowa collected about a quarter of a billion dollars in corporate income taxes in the last state fiscal year and Roberts proposes phasing out that tax.
“Coming out of this economic recession, Iowa could position itself in a very favorable way to attract business to relocate to the state,” Roberts says. “And I don’t know that there will be a lot of states in the kind of economic position that we could be to be as attractive to business as I think we could with this proposal.”
Republican Bob Vander Plaats, a Sioux City business consultant who is also running for governor, said this fall that the state should quit “picking winners and losers” in the business community through specific tax breaks and state grant to a handful of business and, instead, consider doing away with the corporate income tax altogether.