Today’s virtual House graphic: The real business of business taxes in Iowa

The secret is out: Iowa’s business taxes are low

170222-IPP-biztaxes-Anderson

One of many measures showing Iowa to be low or in the middle of the pack on business taxes is a study by the business consulting firm Anderson Economic Group. In its 2016 business tax rankings, Anderson ranked Iowa business taxes fourth-lowest.

In that analysis, Anderson looked at 11 taxes on business, and examined more than tax collections, but also how taxes paid by business compared to income available to pay the tax. Anderson said it used “taxes paid as share of profits, as this measure directly compares taxes paid to business income available to pay the tax.”

In fact, by the Anderson measure, Iowa ranks below all of its regional neighbors except South Dakota, which is lower only by one-tenth of a percentage point.

This finding is not unusual despite claims from the business lobby about Iowa taxes on business, as we have shown before. The latest examination by a widely known business accounting firm, Ernst & Young, puts Iowa state and local business taxes in the middle of the pack and below the national average, at 4.5 percent of private-sector GDP.

Editor’s Note: The Iowa House of Representatives now denies the ability of lawmakers to use visual aids in debate on the floor. To help Iowans visualize what kinds of graphics might be useful in these debates to illustrate facts, on several days this session we are offering examples. Here is today’s graphic, to illustrate where Iowa rates vs. other states, by responsible measures, on business taxes.

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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