The Iowa Values Fund makes the most sense when a low-tax state is surrounded
by other low-tax states, and buying growth by offering people and businesses
grants, or forgiveable loans to relocate, is your only option.  

A "values" fund makes the least sense when you are a high tax-state,
surrounded by high-tax states, and, instead of buying growth, you can take
people and businesses away from competing states by simply giving everyone
willing to move a "discount" on their taxes.  It's like Iowa becoming the
Wal-Mart of the midwest.  People and businesses will move because they will
not only have more money in their pockets immediately due to the discount,
but also to get out of the way of the  tax increases that will be coming if
they stay.  And for people already living in Iowa, history indicates that
your property value will rise with the influx of new residents.

If you look at this opportunity from Iowa's current perspective, we do not
have a deficit anywhere near the size of the deficits found in neighboring
states.  Minnesota's, for example, is expected to be approximately $4.6
Billion this year and they have no specific plan to address it.  That makes
them very vulnerable to any significant discount that we would offer their
best individual and corporate residents.

Let's be specific here.  If Iowa "discounted" its tax on personal and
corporate incomes to 1.5%, then people and businesses in Minnesota that make
money and pay lots of taxes would be motivated to move here.  The discount
puts money in their pockets immediately, and moving to Iowa makes certain
that they won't get hit by the tax increases that Minnesota is likely to
impose in order to solve their budget problems.

If you look at Illinois, an income tax rate at 1.5% would be half of what
they are paying, and we could sweeten the pot by "discounting" the tax rate
on interest, dividends, pensions, Social Security and capital gains, just
like President Clinton did for homeowners.

By taking this approach, Iowa wouldn't need much of a Values fund at all.
We could copy the advertising the auto industry uses and spend as little as
$5-10 Million in four states to get our message out. 

"When you buy a new car you get two things: a discount and 0% financing.
Well, now Iowa's DISCOUNTING your taxes!  That's right!  Move to Iowa and
you'll pay only 1.5% on your earned income with 0% to pay on interest, 0% on
dividends, 0% on pensions and Social Security and, 0% on capital gains!"

If we did this, Iowa would look like a Wal-Mart on Christmas Eve.  And our
tax revenues would go off the chart because we'd have more people paying
taxes.  In other words, your taxes would go down, but the state would make
up that loss on the volume increase due to the migration of people and
businesses to Iowa.  It's the same principle on which Wal-Mart operates
everyday: in order to get more sales they discount their prices, and they
make more money by doing it.

Lastly, by going after mature businesses with real profits, Iowa will make
it depressingly difficult for states like Minnesota and Illinois to match
our low rates.  And new businesses will want to locate here, too, because
with discounted tax rates, they'll make money sooner than if they were
located in Illinois.

But, AND THIS IS A WARNING, the first to discount gets the biggest return,
and it goes on for decades.  Just look at Japan, Hong Kong, Korea, Germany,
Ireland, and now even Russia.  So Iowa needs to be the first to discount.
We can STILL have a Values Fund.  Although, in this setting, the name is
oxymoronic because you get so little value for what you give.  In other
words, this approach brings people and businesses that need money.  A state
like Iowa, which needs money, should be looking for people and businesses
that already have it.

BE AN IOWAN TODAY.  SUPPORT DISCOUNTING.