RETURN WASTED TAX CREDITS AND USE TAX EXEMPTIONS TO TAXPAYERS!

3-27-17

Greetings, Iowa Tax Expenditure Committee Members and all—

The C. R. Gazette tax and spend editorial board has suddenly shown some interest in state taxing and spending in order to get more money for the state to waste.  They even used the  PERFORMANCE  word in the headline for a 3-26-17, 1,285 word editorial on income tax credits and use tax exemptions!!   The words RETURN ON INVESTMENT (ROI)  were similarly used in a 3-5-17, 2,030 word editorial on income tax credits. 

The shock of Gazette tax and spenders using those words, as proof they actually know them, diminishes greatly when it becomes obvious they are only applying them to tax money returned to tax payers—not money spent and wasted by state schools and agencies, at the Gazette’s  behest!!!   The editors are trying desperately to build a case to have the tax credits and tax exemptions rescinded and deviously returned to the state to spend—as if the state is operating more efficiently than are the tax payers/recipients of the credits and exemptions.  

Gazette editors want the Tax Expenditure Committee to provide the PERFORMANCE and RETURN ON INVESTMENT numbers for the amounts returned to taxpayers.  The editors have not the foggiest idea of what the numbers are, and are just blindly whining, as usual.  The table below will help the Committee get started,  and will give the editors the best available clue as well. 

This is totally bizarre Gazette behavior as the tax and spend editors have never shown any interest at all in PERFORMANCE or ROI in billions wasted by schools and state agencies.  So once again Iowalive net workers have stepped up and provided the numbers in the following table to show the editors and all, what is going on.    It is estimated it would cost at least $180,000 to have capable professionals prepare the table, which is provided by Iowalive at no cost to anyone!! 

In addition, please be advised the State might have strings attached to the returns to make it more difficult for recipients to use them efficiently.  Such as in School Tax Credits etc. with strings that Online schools etc. have to hire state licensed teachers, who haven’t been trained to teach—and would have to use the flawed Iowa Core curriculum that all but guarantees continuation of waste and failures experienced by Iowa’s public schools.  It defeats effective school competition as well.  281--Iowa Administrative Code 79  79.15(8) & (9)

Educators have school boards locked in an impossible situation.  http://www.iowalive.net/schoolboards.htm  IASB,  please forward this post to all school boards.

RETURN WASTED INCOME TAX CREDITS & USE TAX EXEMPTIONS TO IOWA TAXPAYERS

$1.888 BILLION IOWA STATE INCOME TAX CREDITS & SALES & USE TAX EXEMPTIONS WASTED IN THIS TABLE SHOULD BE TERMINATED & THE MONEY RETURNED TO TAXPAYERS AS EQUIVALENT TAX CUTS.  NO WAY SHOULD IT BE GIVEN TO THE WASTEFUL  STATE GOVERNMENT OR SCHOOLS, AS A SNEAKY FUNDING INCREASE.    Source:  Iowa Dept. of Revenue, Gazette and Iowalive 3-27-17

75% OF GRAND TOTAL INCOME TAX CREDITS & SALES & USE TAX EXEMPTIONS IN THIS TABLE ARE WASTED.  THIS COMPARES TO ONLY 40% WASTED IF RETURNED TO TAXPAYERS, AND IT'S THEIR MONEY!!  GIVE IT TO SCHOOLS AND 63% WOULD BE WASTED.

Operating Efficiency &  a.k.a. Return on Investment (ROI) Rank

$ Millions

TOP 10 IOWA INCOME TAX CREDITS, Fiscal  Year 2017.  Source:  Iowa Dept. Of Revenue & C. R. Gazette

Avg.  Year-To-Date 1-1-17 Operating Efficiency %. a.k.a. Return on Investment (ROI)

% Wasted

$ Wasted, Millions

1

$70.90

 Earned Income Tax Credit: A refundable tax credit for low- and moderate-income workers intended to encourage employment. Size of the credit depends on income.

50%

50%

$35.5

2

$42.50

 Iowa Industrial New Job Training Program: This program, administered by Iowa's community colleges, assists businesses that are creating new positions with new employee training. Participating companies divert withholding taxes that would be remitted to the Department of Revenue to a community college to pay for training for company employees.

45%

55%

$23.4

3

$15.20

 Tuition and Textbook: This credit is available to individual taxpayers who have one or more dependents attending grades K-12 in an Iowa school. The credit percentage is 25 percent of the first $1,000 paid for each dependent for tuition and textbooks.

35%

65%

$9.9

4

$58.10

 Historic Preservation/Cultural and Entertainment District: This tax credit, administered by the Iowa Economic Development Authority and the Department of Cultural Affairs, provides a 25 percent tax credit for qualified expenditures made in the rehabilitation of eligible historic properties.

20%

80%

$46.5

5

$9

 Renewable Energy: This credit is available to a producer or purchaser of energy from a renewable energy facility approved as eligible by the Iowa Utilities Board.

20%

80%

$7.2

6

$23.10

 Enterprise Zone Credit and Housing Component: This program, administered by the Economic Development Authority, encourages investment in Iowa's economically distressed areas by providing local and state tax credits, refunds and exemptions to qualifying companies that expand or locate in designated Enterprise Zones.

10%

90%

$20.8

7

$37.60

 High Quality Jobs Program: This program, administered by the Economic Development Authority, provides tax benefits to eligible companies that create high-paying jobs and make capital investments.

7%

93%

$35.0

8

$56.80

 Research Activities Tax Credit: This credit is available to taxpayers who increase research activities in Iowa. The Iowa research tax credit relies on the federal definition of qualified research expenditures.

4%

96%

$54.5

9

$17.80

 Biodiesel Blended Fuel: This per-gallon credit is available to retail dealers who sell biodiesel blended fuel.

1%

99%

$17.6

10

$11.30

 School Tuition Organization: This credit, administered by the Iowa Department of Revenue, is for 65 percent of the amount of a voluntary cash contribution made by a taxpayer to a school tuition organization.

1%

99%

$11.2

SUB TOTAL

$342.30

SUB TOTAL WASTED

24%

76%

$261.5

Operating Efficiency &  a.k.a. Return on Investment (ROI) Rank

$ Millions

EXAMPLES OF SALES AND USE TAX EXEMPTIONS--Fiscal Year 2015,  Source:  Iowa Dept. of Revenue  & C. R. Gazette

Avg.  Year-To-Date 1-1-17 Operating Efficiency %. A.K.A. Return on Investment (ROI)

% Wasted

$ Wasted, Millions

1

$53.40

 Ag chemicals, herbicides, pesticides

55%

45%

$24.0

2

$35.50

 Electricity and equipment for data centers

47%

53%

$18.8

3

$3.60

 Annual sales tax holiday, held in August

46%

54%

$1.9

4

$465.80

 Construction services

43%

57%

$265.5

5

$137

 Packaging containers and supplies sold to retailers and manufacturers

40%

60%

$82.2

6

$117.40

 Commercial fertilizer and lime

35%

65%

$76.3

7

$320.70

Transportation services and delivery charges

27%

73%

$234.1

8

$7.90

Massage therapy

27%

73%

$5.8

9

$6.90

Newspapers As of fiscal 2015.

25%

75%

$5.2

10

$570.50

 Medical services

13%

87%

$496.3

11

$435.60

 Food for human consumption

11%

89%

$387.7

12

$10.50

 Fuel used in grain drying

10%

90%

$9.5

13

$19.90

 Lottery tickets

3%

97%

$19.3

SUB TOTAL

$2,185

SUB TOTAL WASTED

26%

74%

$1,627

GRAND TOTAL

$2,527

GRAND TOTAL CREDITS  & EXEMPTIONS WASTED  75% = 1,888.1/2.527.0

25%

75%

$1,888

GRAND TOTAL

$2,527

FOR COMPARISON, RETURN IT TO IOWA TAXPAYERS --IT'S THEIR MONEY TO WASTE LESS OF!!

60%

40%

$1,011

GRAND TOTAL

$7,346

FOR COMPARISON--IOWA STATE GOVERNMENT

37%

63%

$4,628

GRAND TOTAL

$3,230

FOR COMPARISON--Iowa Public Schools (State Funding Only)

33%

67%

$2,164

Operating Efficiency (a.k.a. Return on Investment--ROI) Derivation Methods are Posted on Website: http://www.iowalive.net/deriveopeff.htm

Anyone Claiming to Have Better Numbers is Asked to Provide Them.

 

http://www.iowalive.net/schooltaxcredit.htm

Sincerely,

Iowalive   A  growing  network of volunteer citizens and professionals for improving Iowa