In a recent interview with Tax Education Foundation of Iowa, Dr. Ernie Goss, Professor of Economics at Creighton University, discussed current issues and economic trends for both Iowa and the nation. Goss noted that Iowa’s economy “is still about three or four percent below pre-pandemic levels” but is on the road to recovery. Although both Iowa’s and the national economy are recovering from the COVID-19 triggered recession, the recovery is being threatened by out-of-control spending and potential tax increases.
Iowa’s economy has weathered the pandemic, and, at this time, state revenues continue to grow, but challenges remain. A significant economic concern for Iowa is the need for workers to fill jobs. Goss mentioned that the “inability to find quality workers” is still a major problem for Iowa’s economy. Goss stated that federal policies such as the additional $300 unemployment compensation offered by the federal government deter people from going back to work. As an example, the federal government provides an additional $300 on top of unemployment benefits, which Goss said, “discourages people from working.”
When asked the question, what should policymaker do in terms of economic policy, Goss states that Iowa needs to “take steps that will make your tax system and regulatory system more competitive.” “We have to think about competition,” stated Goss, and he referenced that both businesses and people are more mobile, and tax and regulatory climates will impact the state’s competitiveness. “Iowa needs to be more tax competitive,” stated Goss, especially when our neighbors in Missouri and South Dakota have better tax climates.