LATEST RESEARCH INDICATES FEASIBILITY OF "DISCOUNTING" YOUR IOWA TAXES
 BY:  KEVIN MCLAUGHLIN

THAT'S RIGHT.  ACCORDING TO RESEARCH ALREADY BEING CONDUCTED BY KENT
KRAMER, THE NEWLY ELECTED REPRESENTATIVE FROM JOHNSTON, MOST IOWANS ARE
PAYING STATE TAXES IN THE RANGE OF JUST 2-3% OF THEIR INCOME ALREADY.  AND
IT'S REASONABLE TO BELIEVE THAT A LARGE PORTION OF THIS GROUP IS EARNING
THEIR INCOME, AS OPPOSED TO RECEIVING LARGE AMOUNTS OF INTEREST AND
DIVIDENDS.
 
CONSEQUENTLY,  A DISCOUNTED RATE IN THE 2% RANGE WOULD NOT NECESSARILY
JEOPARDIZE THE STATE'S REVENUE STREAM.  ON THE BRIGHT SIDE, WITH A LOW
DISCOUNTED RATE, SAY IN THE 1.5-2% RANGE, THE INCREASE IN COMPLIANCE FROM
WEALTHIER TAXPAYERS COULD BE SUBSTANTIAL.  AND MORE IMPORTANTLY, AT A LOW,
DISCOUNTED RATE, IOWA BECOMES DEVISTATINGLY COMPETITIVE VERSUS NEIGHBORING
STATES LIKE ILLINIOS, ESPECIALLY.  THE FACT IS THAT A LOT OF SENIORS LIVE
AND WORK IN IOWA UNTIL RETIREMENT, THEN MOVE ACROSS THE MISSISSIPPI TO
AVOID TAXES ON THEIR PENSION INCOMES. WE CAN KEEP THEM HERE WITH THIS
"DISCOUNTING" APPROACH.

REMEMBER THAT, IN ADDITION TO A DISCOUNTED RATE ON EARNED INCOME AT ONLY
1.5-2%, YOU WOULD PAY  0%ON INTEREST INCOME,  0% ON DIVIDEND INCOME,  0%
ON PENSION AND SOCIAL SECURITY INCOME, AND, JUST LIKE BILL CLINTON DID FOR
HOMEOWNERS, 0% ON CAPITAL GAINS. LASTLY, BASED ON HISTORICAL PRECEDENTS,
WITH A LOW, DISCOUNTED TAX RATE, IOWA WILL SEE PEOPLE AND BUSINESSES
LINING UP TO GET IN HERE, IGNITING OUR ENGINE OF ECONOMIC GROWTH.
 
GETTING BACK TO THE ORIGINAL PREMISE FOR THIS EDITORIAL, MR. KRAMER WAS
FORMERLY WITH BANKERS TRUST IN DES MOINES AND NOW WORKS FOR THE FOSTER
GROUP, AN INVESTMENT MANAGEMENT FIRM.  HE HAS A SOLID UNDERSTANDING OF HOW
THESE BUDGET AND TAX NUMBERS FIT TOGETHER, WHICH IS PROBABLY ONE OF THE
MOST IMPORTANT REASONS HE WAS APPOINTED VICE-CHAIR OF THE HOUSE WAYS &
MEANS COMMITTEE IN HIS FIRST TERM: VERY UNUSUAL.
 
KENT IS INTERESTED, LIKE EVERYONE ON THIS "DISCOUNTED TAX CONTACTS" LIST,
IN SEEING IOWA SOLVE ITS REVENUE PROBLEM, EMERGE STRONGER FINANCIALLY AND
MORE COMPETITIVELY FROM THESE DEFICITS THAT THREATEN TO OVERTAKE US.  IT'S
ALSO VERY IMPORTANT TO HIM TO SEE THAT NO ONE IS HARMED BY PROGRESSIVE TAX
REFORMS, ESPECIALLY THE MOST UNDERPRIVILEGED AMONG US.  HE SUPPORTS THE
DISCOUNTING APPROACH, OR ANY OTHER POSITIVE TAX REFORM, THAT ACHIEVES THE
SAME LEVEL OF TRANSPARENCY AND SIMPLICITY FOR IOWA'S TAXPAYERS.

IN SPEAKING WITH HIM LAST WEEK, HE MENTIONED THAT HE AND CHRISTOPHER
RANTS, THE SPEAKER OF THE HOUSE, HAD BOTH BEEN IN CONTACT WITH IOWA'S
FISCAL BUREAU IN ORDER TO GET THE FACTS ABOUT WHO PAYS IOWA'S TAXES AND
HOW MUCH THEY'VE BEEN PAYING.  IT IS THIS SET OF FACTS THAT IS CONVINCING
KENT OF IOWA'S ABILITY TO TRANSITION TO A DISCOUNTED OPTION FOR TAXPAYERS
THAT WILL MAKE BOTH YOUTHFUL AND SENIOR IOWANS WANT TO STAY HERE.  IT IS
ALSO IOWA'S ABILITY TO ACT BOLDLY IN  DISCOUNTING OUR TAXES NOW, AND THE
BENEFICIAL TIMING OF SUCH A STEP, THAT IS CONVINCING HIM THAT WE CAN TAKE
PEOPLE AND THEIR BUSINESSES AWAY FROM NEIGHBORING STATES, SOLVING OUR
PROBLEMS AND ENRICHING OUR RESIDENTS, SIMULTANEOUSLY.
 
THE QUESTION IS GOING TO COME UP, SO WHAT ABOUT THE DEFICITS THAT WILL BE
EXPERIENCED INITIALLY?  FIRST, WE'VE ALREADY GOT A BIG DEFICIT, AND WE GOT
IT BECAUSE OF OUR CURRENT TAX AND BUDGET POLICIES.  IT'S THE IDEA OF DOING
NOTHING, OR SOMETHING IN STAGES THAT WILL BRING ABOUT EVEN WORSE DEFICITS.
SECONDLY, USING YOUR DISCOUNT WILL BE AN OPTION UNDER THIS PROPOSAL.

INDIVIDUALS AND BUSINESSES WILL STILL BE ABLE TO FILE WITH ALL THEIR
DEDUCTIONS IF THAT METHOD PUTS MORE MONEY IN THEIR POCKETS, IMMEDIATELY.
AND MANY TAXPAYERS WILL PROBABLY PAY WITH ALL THEIR DEDUCTIONS, NOT BEING
ACCUSTOMED TO THEIR NEW DISCOUNT.  SO THE DISRUPTION TO THE STATE'S
REVENUE STREAM WILL BE REDUCED TO SOME EXTENT BY THE OVERALL RATE OF
ADAPTATION.  
 
MOST IMPORTANT OF ALL, THE COUNTRIES AND ECONOMIES THAT HAVE GROWN BY
DISCOUNTING THEIR TAXES HAVE DONE SO BECAUSE THEY RECOGNIZED THEIR
ENHANCED ABILITY TO COMPETE AGAINST THEIR NEIGHBORS, AND THAT THE DEFICITS
WOULD BE TEMPORARY.  THE HISTORICAL PRECEDENTS FROM WHICH WE CAN TAKE
COMFORT ARE NUMEROUS.  REMEMBER THAT BOTH GERMANY AND JAPAN CAME OUT OF
WORLD WAR II WITH ENOURMOUS DAMAGES AND WAR DEBTS WHICH, IN THE LONG RUN,
MADE LITTLE DIFFERENCE.  HIGH TAXES WOULD HAVE KILLED ECONOMIC ACTIVITY,
BUT LOW TAXES CAUSED THEIR ECONOMIES TO SOAR. 
 
AND, AS FURTHER PROOF, REMEMBER THAT HONG KONG DECLINED FROM APPROXIMATELY
1.5 MILLION PEOPLE BEFORE WWII, TO JUST 500,000 AFTER THE DEVISTATION OF
THE JAPANESE OCCUPATION.  AND YET BY 1997, WHEN THEY WENT BACK TO THE
CHINESE, THEY HAD GROWN TO BECOME A CITY OF 6.5 MILLION PEOPLE WITH A
SURPLUS OF $40 BILLION, ACCORDING TO THE WALL STREET JOURNAL.  FOR MORE
MODERN EXAMPLES OF THE DYNAMIC SUCCESS OF A DISCOUNTED APPROACH, WE COULD
ALSO CONSIDER IRELAND AND THE MOST BACKWARD OF ALL COUNTRIES ECONOMICALLY,
RUSSIA.  BUT ENOUGH IS ENOUGH.

THE POINT IS THAT THE DISCOUNTED APPROACH WORKS SO WELL BECAUSE PEOPLE
BEGIN MAKING MONEY SO MUCH SOONER WITH IT.  AS AN EXAMPLE, CONSIDER THE
ROMANS AT THEIR PEAK: IT TOOK THE AVERAGE ROMAN ONLY TWO DAYS WORK TO PAY
HIS, OR HER TAXES FOR AN ENTIRE YEAR.  THAT MEANS THAT THEY BEGAN WORKING
FOR THEMSELVES ON JANUARY 3RD.
 
SO LET'S NOT SPEND TOO MUCH TIME FOCUSING ON THE DEFICITS.  WE NEED TO
SPEND MOST OF OUR TIME CONCENTRATING ON OUR OPPORTUNITY TO DISCOUNT OUR
TAXES FOR INDIVIDUALS AND CORPORATIONS, ALIKE.  HISTORY HAS SHOWN,
REPEATEDLY, THAT THE FIRST TO DISCOUNT GETS THE BIGGEST REWARD FOR IT, AND
THAT THE REWARD GOES ON, AND ON, FOR DECADES.
 
LASTLY, THIS IS NO TIME TO BE DEMOCRATS, OR REPUBLICANS ON THIS CRITICAL
OPPORTUNITY.  WE ARE IN A POSITION TO PUT MORE MONEY IN OUR POCKETS
IMMEDIATELY, SEE OUR PROPERTY VALUES RISE AS WE IGNITE IOWA'S ENGINE OF
ECONOMIC GROWTH, AND SOLVE THE STATE'S REVENUE PROBLEM ALL AT ONCE.  BUT
WE HAVE TO WORK TOGETHER AND WE HAVE TO ACT NOW.   
 
SUPPORT THE DISCOUNTING YOUR IOWA TAXES. BE AN IOWAN TODAY!