“I didn’t really know about taxes. Then my W-2 came in from the contract I signed, and I was like, ‘Yeah, I need to go.’ ”
Did you expect the usual stories that come out of spring training would include talk about taxes? We didn’t either. But a recent article from the sports page in Minneapolis illustrates how high taxes impact where people live – even baseball players.
Minnesota Twins prospect Royce Lewis explained his decision to move from California to Texas. One of the reasons was because Texas doesn't have a state income tax and Lewis had a $6.725 million signing bonus.
“I didn’t really know about taxes. Then my W-2 came in from the contract I signed, and I was like, ‘Yeah, I need to go.’ ”
- Royce Lewis
It's not just athletes who consider their tax bill when relocating. For over a decade, Rich States, Poor States has shown states with lower taxes, specifically low income taxes, have had more people move into their state than states with high income taxes.
U.S. Census Bureau data shows in 2018, Iowa:
Gained residents from states with higher taxes:
- Illinois: net gain of 7,772
- California: net gain of 1,974
- Minnesota: net gain of 1,660
Lost citizens to states with no income tax:
- Florida: net loss of 1,607
- South Dakota: net loss of 2,434
- Texas: net loss of 2,979
People move for many reasons, but the amount of money state government takes from taxpayers plays a part.
Iowa is in competition with the rest of the country, especially our Midwestern neighbors, to attract and retain people and businesses. Taxes matter, and the best way to improve Iowa’s tax code is to cut income tax rates.
What's Happening at the Capitol?
This week, a Senate subcommittee heard public comment on the Governor's comprehensive tax reform plan. ITR Gov't Relations Director Victoria Sinclair told subcommittee members, "We applaud this effort to thoughtfully reduce Iowa's tax burden and drastically increase the competitive nature of Iowa's tax code on a national level."
The Iowa Capital Dispatch reported:
The Republican chairman of the Senate’s tax-writing Ways and Means Committee, Sen. Jake Chapman of Adel, said there may be a second subcommittee meeting. He noted that some groups raised concerns but noted, “Overall, it appears the stakeholders are very supportive of what the governor proposed.”
That doesn’t change the fact that many Republican lawmakers have issues with the bill, he agreed. “Our caucus has made it very clear that we want to see deep tax cuts,” he said. “… But we also recognize that these aren’t just priorities of the governor, these are priorities of Iowans.”
According to a poll conducted on behalf of ITR a few weeks ago, 51.8 percent of Iowans were in favor of tax reform similar to what Governor Reynolds has proposed, while only 32.5 percent opposed.