A quiet, massive shift


Because of an $800,000 increase in road-use tax fund receipts, Buena Vista County will be able to spend $800,000 this year on bridges and culverts. At one time nearly 50 bridges in the county were labeled structurally deficient. County Engineer Bret Wilkinson is happy to begin catching up with all that deferred work because Gov. Terry Branstad allowed a fuel tax increase two sessions ago. Safety will be enhanced. Driving will be smoother. The economy gets a little boost. Carbon consumption is discouraged at the margins. This is good.

Increased taxes can create benefits for everyone. The gains can benefit the entire community more than the cost of the tax increase.

What’s more interesting is what taxes are good to which interest. Therein lies the politics of it.

Gov. Branstad allowed the fuel tax increase because agriculture, business and industry want it. They want a four-lane Hwy. 20. They want better secondary roads, which increasingly support commuter and commercial/industrial loads in rural Iowa. They want faster roads to move goods and services between populated areas.

A fuel tax increase is just and right, then.

But …

Working stiffs pay more of their income on gasoline than the CEO. The fuel tax is a sales tax, which is structurally regressive; it puts relatively more of the load on the working poor than it does on the ownership class that depends on better, bigger and more-direct roads to move food from farm to market.

We have local sales taxes applied to municipalities and schools. Again, the working class pays more for city streets and parks with their retail purchases than people who drive a Lexus.

Taxes on commercial and multi-family residential properties have been reduced by the legislature, the burden shifting to the single-family homeowner for local government services. Likewise, sales and property taxes on manufacturing equipment have been eliminated, because the investor class demanded it. Income tax rates are reduced, which does not benefit the working poor even indirectly — if it did, we would not be talking about raising the state’s minimum wage to a living scale.

The state has allowed more than $1 billion in income and property tax breaks to the investor class while increasing property and sales taxes on the working class. (Yes, there are and always have been classes in Iowa, not as bad as India but classes nonetheless.) They get away with it because the working class thinks it can evolve into the ownership society somehow and they don’t want their future lottery winnings taken by the state treasurer.

You would think that someone in the Iowa Democratic Party would talk about the massive tax shift — more than $1 billion in income tax cuts alone in the last 30 years, not to mention billions more in corporate tax welfare credits to “create” jobs that would have been created anyhow — but it doesn’t do that much. Progressives mainly complain about the tax credits to an Egyptian fertilizer prospector, but not that tax shift that milks the state without investing back into its future. Roads, yes. Direct aid to Monsanto and Dupont, yes. K-12 schools, no. Lower tuition at state universities and community colleges, no. More money for environmental enhancement and protection, uh, no. In fact, less money for natural resources, education and Medicaid that covers grandma in the nursing home.

The working man in Iowa has watched his income decline by 50% relative to inflation over the past 30 years. The union is busted. But his relative tax load, figuring in property taxes and sales taxes and fees for water and sewer and textbooks and to get into the swimming pool, has probably gone up that much. He is not in better shape today than he was before all this tax reform made Iowa broke. We have a structural deficit in the state of about $400 million per year, by our ciphering. It might be twice that much if you factor in the Medicaid reform dreamed up by Branstad that ultimately will reward insurance companies like bandits.

Most of this came at the direction of Branstad, our darn-near eternal ruler. Republicans proposed the cuts and the giveaways while the Democrats stood aside and cowered before the Farm Bureau and the Association of Business and Industry, quietly the most powerful lobby. Our policy has been, more or less: jobs, any jobs, we don’t care what they are, and put the costs of those jobs on the workers while paying them half as much as we did when Harold Hughes was governor. And, we have half as many farmers as we did then, if that many. We have fewer hardware stores and newspapers, fewer rural schools, towns teetering on the edge of oblivion with tumbleweed main streets. It’s a distasteful conversation. But it is one we should have. Why would any worker in his right mind want to live in Iowa, where we rip down his workplace protections and tell his grandmother to move out of the nursing home, and pour fertilizer into his water source? Because either we are so desperate, as many workers are around here, that we cling to it in fear and let the machine roll over us. Or we think that somehow this deconstruction will play out to our favor as the last man standing. The next election for governor should enjoin this debate.