Academic journal article Policy Review

One Cloud, Fifty Silver Linings

Academic journal article Policy Review

One Cloud, Fifty Silver Linings

Article excerpt

Are you better off now than you were 20 years ago? This is the question con- servatives ought to be asking instead of second-guessing Republican strategy in last year's presidential race or grumbling over the incredible shrinking tax cuts in the federal budget deal.

Conservatism's biggest victories of the past 20 years have actually occurred in the states, where popular support for individual liberties, smaller govern- ment, and traditional values has grown tremendously since liberalism's heyday in the 1970s. In the first of a series of dispatches from the 50 states, Policy Review monitors a number of political trends that answer the question posed above with a resounding "yes!"

Iowa and Taxes

In 1977, the top rate for state income taxes in Iowa was a whopping 13 per- cent. Upon the death of a parent, moreover, an Iowan could wind up paying that rate on anything he inherited. A lot has changed since then.

"This is the best year we've ever had," says Jeff Boeyink, the executive director of Iowans for Tax Relief. Iowans have recently been blessed with a 10 percent across-the-board cut in income taxes (the top rate is now 8.98 per- cent), the elimination of the inheritance tax for lineal descendants, and $21 million in property-tax reduction. These tax cuts add up to $266 million in relief for Iowa taxpayers.

Jerry Bair, the state's revenue and finance director, has worked in the revenue department since 1975. He contends that Iowa taxpayers are much better off today, especially since the state put an end to inflation-driven bracket creep and reformed tax laws to benefit elderly Iowans who live off annuities.

Taxpayers in Iowa have waited a long time for such relief. It was not until Republicans captured the state House of Representatives in 1992 that the legislature passed a law limiting expenditures to 99 percent of the next year's anticipated tax revenues. In other words, the state agreed not only to spend less money than it collected, but also not to spend any unexpected revenue windfall. Within three years, Iowa turned a $400-million deficit into a $400-million surplus.

As the deficit shrank, the state started giving taxpayers some of their own money back: It slashed $100 million from property taxes in 1994, tripled the credit for dependents and expanded the income exemption for pensioners in 1995, and completed the full indexation of income-tax brackets in 1996.

Idaho and the Right to Work

The political campaigns of 1996 highlighted the labor unions' controversial practice of using mandatory dues from their members to support partisan candidates. The larger issue for workers, however, is whether unions should be allowed to force them to become members against their will.

The principle that workers do have the right to join a union if they choose, but ought not to be forced to join as a condition of employment, is known as "right to work." Laws that guarantee employees' right to work are mainly intended to ensure individual freedom in the workplace, but proponents argue that such laws have economic benefits, too.

Right-to-work legislation in Idaho had long been stymied by politics until 1985, when the legislature overrode Governor John Evans's veto and right-to-work became law. Two years later, the state's economy began an eco- nomic boom that continues to this day. Idaho's unemployment rate is the lowest it's been in 25 years. Commerce Department statistics show that Idaho's annual growth of 15.4 percent in per-capita personal income was the highest in the nation from 1987 to 1995. According to the U.S. Bureau of Labor Statistics, economic growth in the 21 states that have right-to-work laws has outpaced the rest of the country by 25 percent since 1991.

"Having the right to work has not only meant freedom of choice, it also means Idaho has led the nation in new jobs and income growth in the decade since it became law," says Gary Glenn, an Ada County Commissioner and the former execu- tive director of the Idaho Freedom to Work Committee. …

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