ITR Live takes a look at a recent article in The Economist showcasing Iowa's recent success in implementing significant broad-based tax reform. Iowa is witnessing a transformative overhaul that offers an exciting departure from the norm. A wave of tax cuts is sweeping across states with Iowa leading the path as a trailblazer in state-based tax reforms. But what does this signify for the country's economy and how will it shape public policies in the future? It's crucial to delve into the developments and analyze the potential implications to understand taxation in its new avatar.

## Iowa - The Gold Standard of State-Based Tax Reform

As Iowa paves the path toward a pro-growth tax landscape, the focus rests on its ability to strategically implement policies that catalyze economic growth. Seizing the opportunity provided by budget surpluses, the state is enabling reductions in tax burdens that reflect in the form of business-friendly policies and an environment conducive to an influx of businesses and families.

Shadowing these reforms is the looming concern of a day of reckoning when tax cuts reach a critical mass. External observers have drawn parallels with Kansas and sketched out apocalyptic scenarios where the arrival of low taxes leads to a crash, largely in key areas such as education and health care. Yet, the virtue of fiscal responsibility ingrained in Iowa's governance bespeaks a careful balancing act insulated from such drastic consequences.

## A Tale of Two Paths: Iowa and Minnesota

In stark contrast to Iowa's commitment to lower taxes, the narrative of Minnesota's taxation strategy reveals a different strain of thought. Adopting a path of increased government spending, Minnesota cranks up expenditures by a whopping 38%, firmly positioning itself as a state that opts for left-wing policies. This fiscal freedom, however, brings with it the question of sustainability in the face of year-on-year revenue constraints.

At the heart of this discourse lies the individual taxpayer. Citizens increasingly 'vote with their feet,' so to speak, gravitating toward states that meet their expectations of governance. As Iowa navigates this dramatic overhaul, the state's electorate seems to underscore their approval by consistently electing representatives who are proponents of lower taxes.

This story of two neighboring states tells us that there might not be a one-size-fits-all approach when it comes to state revenue management. Different populations may find merit in varying styles of governance, and that in itself could lead to distinctions in state policies. Nonetheless, with its widespread tax cuts and commitment to economic growth, Iowa stands as the proverbial beacon, showcasing what can be achieved through effective governance. Whether the nation takes a leaf out of Iowa's tax reform book or charts its own course remains to be seen.

Speaker Mike Johnson

In recent days, a political shift has occurred. A new House has been elected following three arduous trials, with Mike Johnson coming to the forefront as a very strong conservative and a favorable choice among many. While Johnson might not be as recognized as Jim Jordan, his staunch conservative credentials are well approved. Interestingly, along with Mike Johnson, House Majority Leader Steve Scalise hails from Louisiana, making it an unexpected event to have the speaker and the majority leader from the same state.

Still, the reality remains. The problems present in Washington, D.C. extend much deeper than the leadership of one caucus in one chamber. An overwhelmingly conservative leader doesn't necessarily equate to straightforward solutions, especially considering the liberal Democrats currently controlling the Senate and the White House.

Analyzing the 2024 Election

A common misconception surrounds the future 2024 election: the belief that it will be heavily influenced by the elected speaker of the House. This notion is far from the truth. Candidature and political stances will not be the determinant factor for voters. For instance, voting for Mike Johnson for Speaker won't necessarily sway voters from their preferences as a large scale of what matters lays in personal records and the work done in the district.

Public opinion polls clearly show President Biden and Democrats being held accountable for the inflation problem, which will be the real focus on voters heading into next year's election.

Kim Reynolds and Border Security

In the realm of border security, Iowa Governor Kim Reynolds has shown a strong commitment to ensuring the safety and sovereignty of our nation. As border security remains a pressing issue for all Americans, Reynolds has actively engaged in efforts to support actions that strengthen border control and curb illegal immigration.

Governor Reynolds recognizes the importance of securing our borders to address the concerns regarding national security, drug trafficking, and human trafficking. Through close collaboration with federal authorities and advocating for stronger border enforcement measures, she aims to protect the well-being of Iowans and all citizens across the United States.

Public Libraries

John Hendrickson is not only one of Iowa's leading conservative voices, he is also a former public library board member and remains a strong advocate for public libraries. He believes that libraries are still highly valued by communities, and although they may need to adapt and change, they should continue to receive funding. There has been concern about potential budget cuts to libraries due to property tax reforms, but these cuts have not yet been implemented. Hendrickson suspects that these claims could be scare tactics used by local governments to discourage future property tax reforms. Overall, he reassures that libraries are essential services that communities are unlikely to stop funding.

# Iowa's Progress on the Tax Front

The State of Iowa has shown significant progress in improving tax policies, highlighting the power of conservative governance in recent years and establishing a model for other states to follow. According to the annual state business tax climate rankings from the Tax Foundation, Iowa has stepped out of the top ten worst tax climates and is steadily improving its position.

It's important to note that this success did not happen overnight. Iowa's climb in the rankings is a result of a continuous process of pro-growth tax reforms since 2018, which gradually brought about substantial improvements in different categories of the state's tax climate.

*An In-Depth Look into the Rankings*

The Tax Foundation ranks states based on corporate tax, individual income tax, sales tax, property tax, and unemployment insurance tax. As of the recent rankings, Iowa placed 29th in the nation for corporate taxes, showing considerable improvement. Furthermore, the state ranked 22nd in individual income tax, 15th in sales tax, and 32nd in unemployment insurance tax.

However, the rankings show that Iowa still has a notable challenge - property tax. With the state ranked 41st in the nation in this category, it is evident that the concerns of property taxpayers can't be ignored. Calls for reforms in this area are well justified and must be addressed to maintain overall progress in the state's tax climate.

*The Benefits of Good Tax Reform*

Good tax reform has driven Iowa's advancements in the tax climate rankings and will continue to fuel further improvements. Plans are already underway to introduce a flat 3.9% tax by 2026, which will significantly enhance Iowa's position.

Moreover, the reduction of income tax rates since 2018 has set the state on the path of positive transformation. By focusing on broadening the sales tax base, the state has been able to reduce income tax rates successfully, with impactful results already evident in the tax climate rankings.

Good tax reform does more than just improve rankings - it plays a crucial role in fostering economic growth and attracting investment. As the Tax Foundation succinctly puts it, tax rates matter. In the current highly mobile economy, businesses often prefer investing in states with competitive tax climates. Iowa's progress on this front makes it more attractive for business investment and can stimulate economic development.

*The Road Ahead*

While the state has made laudable progress, the journey to optimal tax reform is far from over. It's a race for tax competitiveness, and other states won't stand still. As other states enact their own tax reforms, Iowa must continue to build on its existing progress and address impending challenges effectively.

Property tax remains a key area that needs urgent attention. For Iowa to get out of the bottom ten in property tax rankings, politicians must listen to their constituents and make essential reforms in this area.

Overall, the task at hand for Iowa's lawmakers is clear: they must sustain the long-term vision of aligning revenue and spending, thereby enabling taxpayers to retain more of their hard-earned money. The work may be complicated, and the process sometimes slow, but the potential benefits are immense.

Iowa's improvement in the Tax Foundation's state business tax climate ranking is indeed a testament to the potential of conservative, pro-growth policies in fostering economic development. As the state forges ahead with further reforms, it is well-positioned to set an enviable standard for tax climate that other states can aspire to. As these internal changes continue to gain national attention, Iowa's standing as a leader in tax reform will continue to rise.

It's an exciting transformation to watch — and be part of — for every Iowan who cares about strengthening the state's economy and their own financial well-being.

## Addressing Property Taxes in Iowa

Perhaps the most pertinent issue for many Iowans is property taxes. They are frustratingly high and continue to rise at a pace that's unsustainable compared to the rate of inflation and population growth. There's a clear disconnect between how taxpayers perceive property taxes and how local officials communicate about them. For instance, it's misleading when officials claim that they are spending more while maintaining the same levy rate.

This disconnect often results in a blame game, with every local authority involved pointing fingers at each other. The onus is on the individuals who devise and approve the budgets. They control how much tax money will be collected and how much will be spent.

The silver lining is that all this information is available on the ITR local website. It provides a 360-degree view of your local government finances, helping you understand how your tax money is spent and supporting your active engagement in local decision-making processes.

## Local Bonding Decisions and the Property Tax Burden

Another important topic concerns local governments and their approach to increasing expenditure through debt. The question of whether we need or simply want new facilities – like schools or sports fields – is an important one. It's crucial to consider whether bonding, therefore, is the right approach, or if we should be allocating consistent revenue streams towards these expenses.

A significant part of the issue is the over-reliance on issuing bonds for every expenditure. This approach negates any potential property tax cuts that the taxpayers could have enjoyed if the tax money was used wisely. Thus, millions of dollars in new debt are dumped onto taxpayers, which is a huge concern.

In the end, it’s fundamental to separate the genuine needs of a community from its wants, especially at a time of high inflation. The focus should always be on what an investment is offering to the community, its utility, and how it impacts the family budget. This focus will, in turn, push local governments to be more responsive to the needs and concerns of their constituents.

Introducing ITR Local: Empowering Iowans to Engage at the Local Level.

ITR Local is a groundbreaking initiative by Iowans for Tax Relief that aims to inform and activate individuals at the local level. At the heart of this initiative is the user-friendly website itrlocal.org, which serves as a comprehensive resource for all the data and information discussed in this episode.

The primary objective of ITR Local is to empower Iowans by providing them with crucial information about their city, county, and school district. Users can access property tax, budget, and spending data, which are essential for engaging in meaningful discussions with local elected officials. With ITR Local, individuals have all the knowledge they need to make informed decisions and contribute to the development of their respective communities.

John's Visit with President Trump

During his recent visit to Iowa, our co-host John Hendrickson, was fortunate enough to attend a rally in Clive, at the Horizon Event Center, where Former President Trump gave a thoughtful and informative speech on several policy issues, particularly the trade policy. The rally was impressive, teeming with energy, and had standing room only crowd. The experience for Hendrickson was enjoyable and exciting, meeting the president and a lot of great people.

Active participation in campaigns, regardless of whether your candidate wins or not is always thrilling. Being involved in the election process of the leader of the free world, exchanging thoughts with various people, and understanding the diverse opinions that exist, makes the whole process worth cherishing. We encourage every American, irrespective of their political allegiance, to experience this excitement.

Inherent in ITR Live's discussions are the shifting dynamics of the Republican Party. The hosts aren't afraid to question the direction it's heading or the strategies it uses. As the balance of power hangs by a thread, they constantly scrutinize potential nominees' ability to secure the 217 votes required to assume the speaker of the House of Representatives' role.

Names such as Steve Scalise and Jim Jordan have been thrown into the ring, their candidacies dissected along with the implications they could have on the party’s future. Acknowledging voter concerns about property taxes, the hosts commend legislators who have taken steps towards tax reform. They underscore the importance of continued civic engagement to keep elected representatives accountable for realizing much-needed reforms.

**Global Threats and American Reponses**

Recently, the increasing conflict between Israel and Hamas received particular attention. Drawing from a Wall Street Journal opinion piece by Walter Russell Mead, they consider whether the West has the resilience and resolve to address this brewing crisis.

Acknowledging the potential for escalation into a region-wide war in the Middle East, the hosts emphasize the importance of measured and strategic responses. This includes perceiving and responding to the growing alliance between China, Iran, and Russia as well as reconsidering America’s military strength.

# The State of America's Foreign Policy: Reflecting on the Israel Crisis

The world has been helplessly witnessing the horrific brutalities unfolding in the Middle East over the past few weeks. Attacks on Israel by the Palestinian group Hamas, has shocked the international community and has also shifted the perspective of foreign policy discourse within America.

## Israel - A Time-Tested Ally

Israel, an enduring ally of America, has been facing concentrated, malicious attacks from Hamas which has stirred unprecedented chaos and loss of innocent lives in the region. The attacks are nothing short of barbaric, characterized by cold-blooded executions of civilians, including women and children. Essentially, it represents indiscriminate hatred towards the Jews and violations of human rights on a grand scale. In the light of such alarming occurrences, it is imperative for America, and indeed the world, to support Israel.

## The Implications of America's Domestic and Foreign Policies

While supporting Israel forms an important aspect of U.S-Israel relations, the way America has facilitated grave situations, directly or indirectly, cannot be overlooked. Weapons and supplies left behind during the American withdrawal from Afghanistan have found their way to Gaza. Besides this, the Biden Administration's recent decision to provide Iran with $6 billion has raised several eyebrows. This funding could potentially be used to further fuel the ongoing conflict.

Moreover, the Biden Administration’s reversal of stringent policies towards oil-producing nations has increased the price of oil globally. Coincidentally, this policy shift has been an economic windfall for Iran, thus indirectly boosting its ability to support Hamas.

Finally, the America's poorly regulated, porous southern border might have unintentionally facilitated the entry of individuals with potential hostile intent into the country.

## The Strains of War

In this difficult period as Israel faces its own version of 9/11, a discourse of war is natural. However, caution must be exercised before entering into another long, draining, and costly conflict. The lesson to learn from the aftermath of 9/11 is to focus on eliminating the immediate threats instead of taking on unnecessary wars.

Furthermore, the Republican Party needs a careful introspection. Some figures within the party seem excessively passionate about getting into a war with Iran. While supporting Israel is a non-negotiable commitment, a new elective war abroad should never be our first choice.

## Future Insights

The upcoming days will influence the public's perception of the potential Presidential candidates and their stance on the Israel-Hamas conflagration. It will give the masses a clearer picture of who they can trust on key foreign policy issues, most importantly preserving peace and security in the Middle East.

## There is no AAA to call in the Iowa Caucuses

Chris took a trip down memory lane when he shared a story about one particular caucus season which involved Andrew Yang's campaign team, a muddy Iowa road, and a rented Chrysler PT Cruiser. And the sense of camaraderie which resonates with many conservative leaning voters is alive and well in the anecdote. Regardless of political affiliations, be it a staunch Trumper or a Yang Gang supporter, the story showcases the unity and spirit of rural Iowa, where a lending hand is never far away.

Through detailed discussions and analysis, they offer compelling insights into current political happenings. Recent episodes have touched on prevalent issues such as an event involving Vivek Ramaswamy, an upcoming potential presidential candidate. They analyze incidents from a unique perspective, dissecting even the little details. For instance, they appreciated Vivek for his patient and empathetic approach toward addressing the concerns raised by a climate change activist.

Discussions center around presidential approval ratings in Iowa, the statistical data revealing a higher approval rating for Donald Trump compared to Joe Biden.

A hypothetical showdown was contemplated between Trump and Biden, revealing that if an election were conducted today, Trump takes the lead with a favorable nine point difference. Interestingly, discussing an alternative Republican candidate against Biden, the gap broadened to more than 15 points. Their analysis indicates that at this point, another Republican nominee may find stronger support in Iowa

A fascinating element was the introduction of a new hypothetical matchup – Donald Trump versus Democrat Gavin Newsom. Shockingly, Newsom fared even worse than Biden in this scenario. Furthermore, the podcasters highlighted that a shift toward independent voters is observable, who currently lean more towards Trump over Newsom.

From national politics, their attention drifted towards local government matters. A standout point from this conversation was the widespread misconception among Iowans regarding who's responsible for property tax bills. They pointed out how a whopping 25% of Iowans wrongly held the state government responsible. Puzzlingly, this misunderstanding is more prevalent among Democrats.

This has sparked a need for awareness which needs to be carried out, since it's the local government, not the state, that impacts local property taxes. This touches upon another worrying trend: the lack of engagement with local government among Iowans. Considering how little participation there is in city council and county board supervisor meetings, this complacency could be detrimental.

Chris and John emphasized the importance of fostering an authentic dialogue through their podcasts. They urged listeners to dive deep into the questions posed and the responses elicited in their discussions. They're not interested in asking leading questions or influencing listener's responses.

The podcast highlighted that key concerns among Iowans seem to be the economy, immigration, and property taxes. While there is substantial applause for income tax reform, Iowans echo a deep worry about property taxes. This concern appears rooted in local government expenditure, reinforcing the urgency for being aware and engaged.

# The NASCAR Cup Race in Iowa and Its Economic Impact

Iowa is set to host its first-ever NASCAR Cup race. This major sporting event, scheduled for 2024, is eliciting mixed feelings from sports enthusiasts and non-enthusiasts alike. However, regardless of individual spectator interests, one thing is certain - the event has the potential to significantly boost the state's economy.

The NASCAR race is expected to draw a large number of fans, not just from around the state, but from around the region and beyond. This influx of visitors can generate a substantial increase in spending on lodging, food and beverages, transportation, and entertainment. It also provides an opportunity for local businesses to tap into new markets and potentially establish long-term customer relationships.

Just as importantly, the event is also set to increase tax revenue for the state. The economic benefits of hosting a major professional sporting event like the NASCAR Cup race extend beyond immediate spending by fans. The broader visibility and reputation enhancement also have long-term implications for future investment and development.

## The Mariah Carey Christmas Tour

While the economic implications of hosting a NASCAR race are clearly positive, another aspect of entertainment is also worthy of attention, the power of music concerts in boosting the local economy. The potential of a city being included in the international tours of global music stars like Mariah Carey and Taylor Swift is often underestimated.

## Ongoing Feud between Matt Gaetz and House Speaker Kevin McCarthy

Meanwhile, in political news, an ongoing feud between Matt Gaetz and House Speaker Kevin McCarthy is creating quite a stir. Gaetz's attempt to oust McCarthy as speaker has garnered mixed reactions, with some viewing it as a move to hold the Republican party accountable for recent decision-making, while others argue that it lacks strategy and does little more than heighten division within the party.

## Not so "Friendly" Property Taxes in Des Moines

In finance, a recent study confirmed that property taxes in Des Moines are indeed high. Per homeowner, the city of Des Moines charges 2% of the value of a property in taxes per year - a figure higher than most. While taxes are essential for providing necessary services like police, fire departments, roads, and parks, homeowners in Des Moines are understandably disgruntled.

Critics argue that while Des Moines has a large number of properties that are not taxed because they house state capitals or other government buildings, the city also benefits from the increased traffic and additional revenue these organizations draw in. While these debates continue, one thing is clear - property taxes in the city are placing a significant burden on homeowners.

## Tax Reforms in Oklahoma

Lastly, we travel to Oklahoma, where a special session is currently underway to discuss income tax reforms and budget transparency. Governor Kim Reynolds aims to put the tax on a path of elimination and increase government spending transparency through these discussions. The path to eliminating income taxes will not be an easy or quick one, however, it is an important first step in launching a much-needed discourse on financial governance.