By Steve Schultz, Congress Needs Funk Contributor and one of my campaign political consultants
I sat down a couple of weeks ago and started my taxes. This is my second year with self-employment income so it takes a little more time totaling my business expenses and accurately reporting my income. This past year however, I spent a good chunk of it self-employed so I noticed some things on my taxes I hadn’t noticed the year before and there was something there that has really infuriated me.
I recall very recently hearing some of the State Legislature (Democrats) claiming Iowa is a business friendly state. In fact, a couple said that Iowa is one of the most business friendly states. Well, I’m here to tell you that they are lying to our faces.
During a recession like this, it is those of us that are business owners that will move this country forward. Small businesses employ half of this countries work force. Small businesses drive the economy and innovation. Without us, our economy would tank.
Now, the example I’m going to use is small but I know it affects a lot of other sole-proprietors in the state. While I was doing my taxes, I was already expecting to pay the full FICA and other dependency benefits that most people only pay half of because their employer pays the other half. Since I expected it I didn’t really care. What got me, though small in comparison, was the self-employment tax imposed by the state of Iowa. I have to pay an additional $800 to the state because I don’t work for anyone but myself. WTH!
It’s the principle of the “self-employment” tax that makes me a frustrated Iowan. I don’t care what the reasoning is for having a tax on those that work for themselves, the fact that they justify it tells me they don’t care about small business. What it tells me is that Iowa wants to punish those that don’t work for someone by taking an extra $800 out of our pockets and sticking it in their coffers.
A business friendly state should be just that. It’s one that encourages economic development through small businesses. One that doesn’t impose unnecessary taxes on these businesses. I’m not looking for a business tax credit or some hand out. I’m looking for the elimination of unfair tax burdens. This includes the corporate income tax. This is a joke. I don’t care if there are ways around it or it balances out with tax write-offs.
If Iowa would eliminate these useless taxes and be a place for businesses to come during hard economic times such as these, Iowa would flourish and wouldn’t have budget cuts because of the increased tax revenue from increased business activity. Yes, that $800 may not be a lot of money in the grand scheme of things but the image it promotes and message it tells certainly is.