Perhaps no issue better illustrates the philosophical divide between left-wing Democrats and right-wing Republicans than the Earned Income Tax Credit.Â Here in Iowa a theatrical stunt a few weeks back by ultra-Liberal Iowa City Democrat Senator Joe Bolkcom put the issue front and center.Â In the hopes of pressuring Governor Branstad to support a huge increase in the Iowa Earned Income Tax Credit, Pleasantville resident Julie Heck was brought in to symbolize the need for this action by taking part in a press conference before then testifying in front of the Ways and Means Committee.Â Ms. Heck is a single mother of three who is currently receiving the Iowa Earned Income Tax credit, and on this day set about making the case that while she is glad to have itâ€”it sure would be nice to get more of our money.
While Democrats were no doubt tickled by both the media exposure and the perceived effectiveness of this spectacle, the realities surrounding her specific situation, including her own stunning words, expose the utter disregard that liberal Democrats have for all Iowa taxpayers.
The Press Conference
In the press conference Ms. Heck says that she is a single mother of three who works full time and attends college full time at Simpson.Â She made $33,000 in income last year.Â Beyond not paying a penny in Federal income tax, she instead receivedÂ a $5,279 check from the Federal government which combined $2,279 from the Federal E.I.T.C and another $3,000 from the Federal Child Tax Credit.Â Receiving the Federal E.I.T.CÂ in turn qualified her to receive an additional $160 from the Iowa E.I.T.C.Â Without getting into all the numbers, after using a portion of her Federal refund to pay the $410 she owed to the state of Iowa, she ended up not only with a zero dollar income tax burden, but instead was actually paid $4,869 by the government.
While so much is wrong with this picture, two things are particularly disturbing.Â Firstly, instead of being grateful to live in a system that allows her to receive a net profit of $4,869 from the income tax code, she actually had the audacity to sit in front of a microphone and decry the fact that she had to pay any Iowa income taxes at all.Â And, remarkably unsatisfied with what she has already received, she wants even more moneyâ€”it is just unbelievable.
Perhaps the biggest slap in the face here is what she admits to spending some of this refund money on.Â At the 3 minute mark of the video posted above, she plainly states that she is using her Federal â€œrefundâ€ money to help pay for her college tuition, and then proceeds to say that some of this money also goes to match the funds her children manage to save throughout the year.
As a taxpayer who over the last two years alone has sent tens of thousands of dollars to the Federal government and several thousand more to the state of Iowa, I find these details outrageous.Â Let me be clear, I have no problem paying taxes to help those who are destitute, starving, or un-sheltered.Â However, paying for a mother of three who decides that she now wants to attend college full time is a far different matter.
Once any American citizen makes the decision to bring three human lives into the world it is solely their own responsibility to provide for those children by any means necessary.Â Â In this case it clearly means working a second job to provide for her family instead of spendingÂ our tax dollarsÂ to attend college.Â I ask you this, how many hundreds of thousands of Iowans, especially small business owners, send their money into the government each year and afterwards do not have enough left over to afford schooling, or to match their childrenâ€™s savings?
The Politics and Implications
Finally we have Sen. Bolkcom, the Iowa personification of this entitlement mentality, and the political and financial implications of this situation.Â After Ms. Heckâ€™s statementÂ Sen. Bolkcom threatens (at the 7:20 mark) that until the â€œearnedâ€ income tax credit is brought up from its current 7% to either 13% or 20%, that in his mind all tax relief for Iowans is off the table.Â Realize here what this man is actually saying.Â That before he entertains any legislation to cut the taxes of Iowans who have been throttled by actually paying high taxes for yearsâ€”Ms. Heck must first receive an even larger refund.
This attitude and approach are stunning.Â Putting on display a woman who makes $33,000 a year, who attends college fulltime, and already receives nearly $5,000 in government money through the tax code to justify almost tripling the Iowa E.I.T.C is beyond insulting.Â This clearly shows all taxpayers in IowaÂ what little respect some have for the contributions we are making to government coffers every year.
Republicans agreed multiple times last year to increase the percentage of the Iowa E.I.T.C, largely as part of a legislative give and take they hoped would result in other tax proposals gaining passage, but the governor twice vetoed the section raising the credit.Â In explanation heÂ cited his desire to instead include it in a much larger tax reform bill, though the SenateÂ again last month passed it as a stand alone measure (SF 2161).Â The price tag of raising the credit to 20% would cost Iowa taxpayers $49.9 millionÂ every year after it fully phased-in in 2016.Â This is no doubt a number that seems tiny to Democrats, but is a big deal when you consider that Chief Justice Cady is likely to again be denied an additional $10 million in funding for our judicial system, which has been underfunded for decades.
Once again I stress that the root of my problem here is not so much the issue itself or the price tag of passing the increase.Â Above all else, this specific example exposes how we are losing the spirit of defiant self-sufficiency that we once hadâ€”and how quickly it is getting replaced with an attitude that instead asks â€˜what more can you do for me?â€™Â What is so galling about this is not that the government would offer assistance to people in serious need (they certainly should), but rather how that need is now defined.
While this entire production was likely staged with the sole purpose of raising the guilt level and putting public pressure on Governor Branstad to accept the increase, in reality what it raises is a much larger question:
Has the mentality throughout our state become so collectivist in nature that hard working Iowans are going to be viewed as â€œheartlessâ€ for not wanting to payÂ adults to go to college and be able to match their childrenâ€™s piggy bank contributions?
If the answer is yes than Conservatives and Libertarians have a lot more work to doâ€¦and Iowans will have a lot more taxes to pay in the future.
The year was 2010.Â In Iowa, like in the rest of the Country, a reaction to the obscene growth in size and spending at all levels of government boiled into a loud and visible public movement.Â The internet was a buzz, local Tea Party chapters were springing up, and the Iowa Capitol was the site of several well attended rallies expressing the sentiment of less government and lower taxes.Â Two years later, it is time to ask the questionâ€”what results have come of this?
The short answer at the state level here in Iowa isâ€”not too much so far.
Most will argue that more patience is requiredâ€”and they are right.Â Many will cite a variety of reasons that explain the lack of great actionâ€”some valid points to be sure.Â Meanwhile, the more optimistic in the movement will point to some victoriesâ€”and I grant that they have a case.
All this considered, it is hard not to be disappointed with the lack of impact Tea Party ideals have had on Iowaâ€™s legislative process.Â Letâ€™s take a brief look at the landscape.
Victories So FarÂ
Probably the biggest achievement Republicans at the State House can point to is drastically slowing the pace of growth in the annual budget.Â It would likely shock most Iowans to know that the total appropriations made by our legislature in the year 2002 was $4.375 billion dollars, less than a decade later (FY 2011) the amount spent had jumped to $5.8 billion, an indefensible increase of 33% in less than a decade.Â Though slightly more money has been spent in each of the last few years, getting a handle on this expansion was not necessarily a given, and for this kudos are well deserved.
The problem here of course is baseline budgeting.Â The ridiculous increases seen from 2002-2011 have now been built into future budgetsâ€”with next yearâ€™s expenditure and all projected future years being amounts in excess of $6 billion per year.Â The reality is that Iowans, of either political party, who are holding their breath for a significant decrease in their taxes can expect two thingsâ€”a blue-ish hue followed by a funeral.Â The simple fact is that while future tax hikes can be avoided, as long as the legislature is spending over $6 billion a yearâ€”your taxes are not significantly going down.
Other victories that can be pointed to will be met by fiscal purists with justifiable skepticism, the formation of the Property Tax Relief Fund and 0% allowable growth for education in 2012.Â Time will tell, but the Property Tax Relief Fund may end up being yet another technocratic â€œvictoryâ€ in the legislative shell game.Â I may be wrong, but I can tell you from experience that digging down into the details of many proposed reforms and tax cuts often end up being more of an exercise in moving money around than anything else.Â In terms of the achievement of 0% allowable growth, this was gained in exchange for 2% growth in 2013 and could be completely erased if an already proposed 4% growth rate in 2014 is green lighted.Â For the record, approving a 4% increase in education spending would directly cost taxpayers another $196.2 million.
There are many factors that account for this lack of action, and they make it blatantly unfair to directly blame our fiscally Conservative legislators for not achieving sweeping change.
Chief among these is the narrow, but iron fisted, control spend-happy Democrats have in the Iowa Senate.Â Pragmatically speaking, one could argue it doesnâ€™t make much sense to propose large initiatives that are effectively dead on arrival in the Senate.Â In addition to this it is hard to get movement in these areas when one of the major players, the governor, is not fully on board.Â Letâ€™s face it, while he is undoubtedly a strong Republicanâ€”he isnâ€™t exactly going to be caffeinating any bodies of water under the cover of darkness any time soon.
Realistically the most valid reason is the predetermined circumstances surrounding this session.Â All the oxygen is being consumed by the massively involved efforts left over from last session, which include preventing built-in tax increases, re-structuring mental health services, and a flailing attempt at education reform.Â A final thing that deserves mention is that they have been put on defense by having to block a continuing parade of costly bills introduced by the Democrats most Liberal wing.Â Stay tuned as The Conservative Reader: Iowa will be posting an analysis of these proposals in the near future.
Some Boldness Would Suffice
I think that most Tea Party supporters in Iowa have, so far, looked at the variety of factors in play and given a pass to the fiscal-hawk wing of our legislature.Â Most of us are reasonable in our expectations and we realize that big political results are hard to come by.Â That being said, the time to at least start articulating a vision and making the case that real tax cuts will only follow real spending cuts is at hand.Â At this point we are not even demanding deliverablesâ€”even some boldness would suffice.
An example of this boldness has been displayed recently by Sen. Brad Zaun, and everyone in the movement should take the time to drop him a note of moral support.Â Knowing that it would not even survive funnel week, Sen. Zaun proposed a bold bill that contains a future vision of education in Iowa that is worth fighting for.Â Directly following this session other Tea Party leaning members would be wise to start following suit.Â It is their job to start constructing an agenda and a platform that can eventually cut taxes by cutting spending.
So, has the Tea Party Movement in Iowa crested?
While it is fair to reserve final judgment on this, the lack of real legislative results proves at the minimum it has receded.Â As of right now the Tea Party trajectory in Iowa closely resembles the illegal immigration outrage that came to a National boil in early 2008â€”a huge movement that has delivered small victories along the way before largely fading.
After providing the weight for the water displacement which created the wave in 2010, many fiscally concerned Iowans are standing on the shore in 2012 with only soggy ankles.Â I suspect that the political energy needed to make the case statewide forÂ smaller governmentÂ is still readily available.Â What is needed at this point is a tightly formed caucus with a vision supported by pieces of actual legislation.
Without brave and principled leadership this movement cannot be sustainedâ€¦we will be watching.
â€œI have little interest in streamlining government or in making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedomâ€¦..And if I should later be attacked for neglecting my constituents’ “interests,” I shall reply that I was informed that their main interest is liberty and that in that cause I am doing the very best I can.â€
– Barry Goldwater, Conscience of a Conservative
Perhaps more than any other politician of the twentieth century, Barry Goldwater captured the essence of the American spirit – ferocious independence. This spirit depends upon the Constitution for its life and energy. Without our Constitution, our nation is nothing more than another geographic location; nothing but more real estate.
The Goldwater wing of the Republican Party has been asleep for decades, as the economists espousing Keynesian and Chicago School theories on the benefits of inflation became trendy and the American political aristocracy banished the Constitution to the wilderness, to be replaced with a holy mission to spread democracy with armed drones and replace civil liberties with state-managed dependency – what Barack Obama once referred to as â€œpositive rights.â€
Our nation is bankrupt; the unemployment rate is falling, not because people are finding work but because people are giving up and staying at home. While we still import millions of barrels of oil every day, we now export refined gasoline. As the Federal Reserve printed money to inflate the tech bubble, the housing bubble, five military conflicts, the bailout, the wealth conflagration referred to as the Stimulus, and the Treasury bonds sold to raise the money to pay the interest on the bonds sold to pay the interest on the bonds that were sold by Lyndon Johnson. The M2 supply (the number of dollars floating around out there) has more than doubled in the last ten years; as a result each individual dollar is now worth less. By doing nothing more than holding Canadian currency, the Canadian people now have the purchasing power to essentially outbid us for our own gasoline. This is what inflation looks like.
Prior to 1964 no American politician had ever referenced inflation in a political advertisement, and then Barry Goldwater did it. As Lyndon Johnson proposed to pay for a war in Vietnam and the Great Society programs of increased social spending, Barry Goldwater condemned the entire charade as a swindle, a hoax, and a fraudulent promise of perfect prosperity – if we print enough money, we will all be rich.
As the 1960â€™s gave way to the 1970â€™s, the bills began to fall due, and the government realized that its promises exceeded itâ€™s abilities. With little more than a speech, Richard Nixon took us off of the gold standard. As it turned out, William McChesney Martin (then the Federal Reserve Chairman) had printed so much money to pay for Johnsonâ€™s war on poverty that the gold reserves were no longer adequate to back it up. Bye-bye gold standard.
Hello fiat currency. Since 2001, the Fed has expanded our money supply by upwards of $6 trillion dollars. They distributed it to the government – to pay for social programs that are necessary, not perhaps for our national strength, but for the reelection of our politicians, as well as to banks so that they could write mortgages to people who couldnâ€™t pay them back. Nobody cared if the mortgages went bad; the banks had sold them to Fannie Mae, created by the government in 1939 specifically to buy mortgages from banks. Then, in 2008, the Federal Reserve printed the money needed to buy to bonds the Treasury needed to sell in order to fund the bailout of Fannie Mae and the banks.
In his pamphlet â€œConscience of a Conservative,â€ Goldwater blasted what he called delusional dreams of the â€œJacobins and leftists.â€ We in the conservative movement are not supposed to be allowed the luxury of idle utopian dreams, be they making the world safe for democracy, or making our domestic economy so wealthy (through housing and stimulus) that we simply wouldnâ€™t need to save money, manufacture things, or export anything other that Treasury bonds. These goals are fantasies; they have led us to quagmires of humiliation, poverty, and degradation.
Will anyone dare to ask Barack Obama why, when the United States was consistently running trade deficits in excess of $40 billion per month, he believed our problem was a lack of demand? Will anyone ask why he simply assumed that if we paid people to buy new (foreign-made) cars, then our economy would improve? A trade deficit, by simple, logical definition, is the consumption of goods in excess of your ability to produce. Stimulus accomplished nothing more than the further impoverishment of the nation. Who will challenge Barack Obama on this issue?
Enter our Republican candidates, most of whom seem to think that we desperately need to print money to pay for a war with Iran. Is this really the best we can do? A choice between inflationary games to pay for socialism, and inflationary games to pay for a war that we cannot otherwise afford and could easily be prevented? Only one candidate warned of the inflationary bubble in housing as early as 2001. Only one candidate understands the fundamental problem of our economy – too much debt; too little production. Too much urgent government initiative; too little freedom.
â€œExtremism in the defense of liberty is no vice; moderation in the pursuit of justice is no virtue.â€ Barry Goldwater was roundly condemned as an extremist for these sentiments. We live in an age of bankruptcy, fear, and disappointment. Candidates of firm conviction, shrewd talents, or competent judgment are frequently passed over in favor of the candidates with the darkest nightmares, the most delusional promises, or the most artificial of Cheshire Cat grins, with their insistence that spending borrowed money will make us rich and powerful, and if you disagree then you are clearly a cynical malcontent, playing politics at a time when action is required; that is American politics in the 21st Century.
The Goldwater wing of the Republican Party – fanatical adherents to the Constitution, ferocious nationalists, resolute defenders of liberty and individual rights- has been asleep for decades. Without our Constitution, the United States of America is nothing more than real estate. The Goldwater wing of the Republican Party is awake now; and they demand to be taken into account. So far, only one candidate has.
Photo Courtesy of Dave Davidson, his fabulous work can be viewed at http://prezography.blogspot.com/
This is the second installment of a two-part interview, to read part one click here.
Governor Branstadâ€™s legacy-minded education reform proposal has struggled to draw support since its release on October 3rd, and you can count Mr. Landon as one of those lacking in enthusiasm.
A core tenet of Landonâ€™s philosophy is local control. The benefit he sees in applying this principle to education is that the parents of each child, and the teachers in the actual class room, will have their voices better heard and their concerns more directly dealt with,
â€œMy first reaction (to the governorâ€™s plan) is that it drives us towards more state control and more mandates on levels of performance. I think that we are going to have to reform the system, but I think that instead of less local control we need to focus on more local control. I think we need to make sure that the families, the school teachers, and the administrators all have their say on how this should be done. I really believe that parents and school teachers, the people who are in that sector, know the best for their kidsâ€.
The Democrats failure last session to construct Iowaâ€™s insurance exchange program in accordance with Obama Care means that a nasty, brutal fight awaits next year. By all accounts this will be one of the three most high-profile issues debated by the Iowa Legislature in 2012, and one that ultimately drew fellow candidate Stacey Rogers (R-Ankeny) into the race. Landon, for one, would have voted no last year on SF 404 and sounds ready to engage in the fight,
â€œWhat would guide me is local control. The rights of District 37 residents and the rights of Iowans have to come first. Anything thatâ€™s done has to be for their benefit and their economic interests. And frankly, I view Obama Care as unconstitutional from the get-go. I am not in favor of taking care of this through the government because they (the people) will not be taken care of the way they should be.â€
On Illegal Immigration
â€œI am a proponent of legal immigration. It is probably not that big of an issue in this particular district, but there are areas in Iowa where it is. As a state issue I would say that the Federal government, like in so many other things, has failed. I am against the taxpayer having to pay for the upkeep of people who have come here illegally.â€
Barring an unexpected Federal resolution to this problem Landon indicated a willingness to possibly engage at the state level, â€œIf the Federal government wonâ€™t do it and they are going to continue to let the border be porous, from the standpoint of public safety and who is going to protect the taxpayer, there has to be a process that protects you the citizen.â€
On Varnum (Gay Marriage)
â€œThat should have been decided by the voters. That is a monumental shift in society and voters need to have their say. If a constitutional amendment is the only way for voters to get their voice heard on it, then we need to do it.â€
On The Tea Party
In response to a question seeking his thoughts on the Tea Party and if he would consider himself a â€œTea Party-ishâ€ candidate, he answered, â€œI havenâ€™t found anything in their platform that offends me or that I take issue with. I am for individual rights. I think people can make their own decisions and government would be well advised to pay attention to that. Having said that, I am part of the process and a consensus builder, I just donâ€™t think you can go out there as a maverick and get a whole lot done. What I want is for Lincoln and Douglas townships to flourish and for Ankeny to flourish. The only way I can do that is by being an effective voice, and the only way to be an effective voice is to be a part of the process.â€
Race Analysis and Summary
The contest for the Republican nomination in House District 37 will be of elevated importance as the probability is high that the nominee will ultimately be the Representative. Due to the fact that the district has a 2,400 advantage in registered Republicans over registered Democrats in what is already shaping up to be a Republican wave year, it is likely that the nominee may run un-opposed. Even more likely is that if the Democrats do choose to field a candidate they will not bother to recruit a top-notch challenger or commit substantial resources to the effort.
In what could end up being a crowded field of Republicans, John Landon is a serious contender who will be in it for the long haul. He appears both fired up for the race and ready to put in the time and work that will be required to win the seat. The major pillars that his candidacy will be built on are: less intrusive government, more local control, simplicity in legislative solutions, sensitivity to Iowaâ€™s taxpayers, and a vehement opposition to unfunded mandates.
In particular, emphasizing that the failure to make budget cuts leads to higher taxes and a crusade against unfunded mandates could garner wide-spread appeal in District 37.
As his background suggests he is clearly positioned in the race as the â€œbusiness candidate.â€ While often times the â€œbusiness candidateâ€ moniker is attached to folks who have had professional success, itâ€™s worth noting that the business-like way Mr. Landon breaks down large issues as he thinks through them suggests that he would translate these skills to governance should he be elected.
Though we are early in the process, as Republicans begin to look at the field they will find much to like about John Landon as a person and as a candidate.
This is part one of a two part piece.Â AÂ link toÂ the second installment covering the topics of education, health care, illegal immigration,Â gay marriage, the tea party and an early analysis of this race can be found at the end of this article or by clicking on PartÂ 2 here.
The population explosion the city of Ankeny has seen over the last ten years has brought many changes to this Des Moines suburb. Along with construction of a new high school and the surge of large retailers that accompany a population growth from 27,000 to 45,000 in one decade, Ankeny has also received a make-over in its state legislative districts.
In terms of the Iowa House, what resulted is for the first time Ankeny has been split into two House districts. Replacing old HD 70 are new political territories HD 37 and HD 38 (click for maps). While former HD 70 Representative Kevin Koester (R-Ankeny) is running in HD 38, the cityâ€™s other new district, composed of north Ankeny extending to Alleman and east to the Bondurant city line, finds itself without representation.
Recently I sat down with one of the candidates vying to be this districtâ€™s inaugural public servant, Republican John Landon.
Any voter sizing up a candidate who will speak for them at any level of government needs to seek answers to three basic questionsâ€”who are they?, where do they stand?, and why do they stand there? The following should give you a good feel for all three.
Mr. Landon is a fourth generation Iowan who grew up working on a family farm in Marshall County. After serving two years in the Navy, which included a tour in Vietnam, he returned to Iowa and earned a degree in Ag Business from Iowa State University. Following school he embarked on a 28 year career working for two international grain companies. After retiring from that business in 2002, he became a partner in the Iowa based Peoples Company. He, his wife Marvis, and their two children moved to Ankeny in 1994 where he became active in both his church and the Boy Scouts.
His reasons for getting into politics, and ultimately deciding to make this run, are both numerous and specific, â€œI became increasingly dissatisfied with state government over the last 12 years.â€ The root of this dissatisfaction first emerged from the exposure his business career gave him to industry regulations, â€œLots of people in the Legislature make all these rules and say â€˜hey thatâ€™s great,â€™ but they donâ€™t understand the impact that they’re having on people and businessâ€”it has gotten to be a heavy blanket over business.â€
While his business dealings with the government may have laid the foundation, it was a trip to the State Capital over an issue that flared up in 2009 that proved to be the final impetus,
â€œThere became a discussion in the state about the deductibility of Federal income taxes on our state returns. There was a public hearing and we drove down to the Capital and went into the House chamber for that hearing. And I saw the Speaker of the House rule over it like a little dictator with an iron fist, and eventually he threw us all out and cleared the gallery. I realized at that point just how far state government had become removed from the average citizen, and that got me activated.â€
When asked if a $6 billion annual budget was appropriate for Iowa, Mr. Landon clearly indicated that he would come in shooting for a much lower number, â€œI am strongly in favor of people keeping as much as their money as possible . . . we need to break this down and see what we are getting back for the taxes that we payâ€”and Iâ€™m struggling to see what we get back.â€
Directly related to the spending cuts that would be necessary to shrink our yearly outlay, I specifically asked about the $42 million in â€œtargeted reductions and savingsâ€ the governor will be asking the legislature to approve next year and the political peril this may entail. He responded, â€œItâ€™s going to be used as a hot issue no matter what happens, because you are dealing with people who are receiving public aid for their health care.â€
Though no specified cuts have been proposed, he would stand with the governor on this issue in theory, â€œWe are talking about trying to find 2%-3% spent in inefficiencies,â€ a percentage he felt could in part be found using the Six Sigma method.
While noting the complexities involved, he is quick to draw a direct line from the failure to make budget reductions to the eventual higher taxes that they lead to,
â€œI want Iowans to have the best care possible but I also have a heart for the people who are paying taxes, I understand how complicated that balance gets. This is about the will of the people. This is the time where people have to stand up and say either I am satisfied to give up half my income or not. If thatâ€™s what they choose then fine, but I am here to tell you that itâ€™s not fine, and itâ€™s not working. There is no way that people can feel good about the current tax structure and what is going on. We cannot succeed by taxing ourselves to prosperity.â€
One of the major issues to go unresolved last session was tax reform, and center stage in that debate was how to go about lowering commercial property taxes in Iowa. Should this issue come before a Representative Landon he would be inclined to support the largest reduction plan on the table. Interestingly, in addition to standing for cutting taxes he has some proposed solutions to address the root cause of our ever-growing tax burden, â€œWhen these school boards and community boards are faced with mandates for a rule the state is making and they are not sent any money to do it, it is going to end up in your tax receipt just as plain as day. And I think unfunded mandates ought to be absolutely unconstitutional and illegal in the state of Iowa.â€
When asked if this is something he would propose in legislative form on his arrival to the chamber, he replied, â€œThat is a bill that needs to be brought forward and something there needs to be a good public discussion about.â€
Note: To read the rest of the story click here for Part 2