Failing Iowa’s Children: The Shortcomings of Welfare Reform and the Path Forward

Sep 19, 2016

Well written piece

In my judgement, it’s wasteful not to means test the program. Unlike Social Security, and the inter-generational promises made and kept for 80 years, welfare for children does not have any antecedent in Social Security. That said, welfare reform simply didn’t work as it was intended. We need to put vastly greater resources (which costs shockingly little) to directly alleviate poverty, and I very much like the idea of losing some (or all) of the categorical nature of these subsidies. The author is spot on with the problem. I worry the solution is a bridge too far.

Big Meat, Small Towns: The Free Market Rationale for Raising Iowa’s Minimum Wage

Jun 03, 2016

Mexican Beef?

Very well written piece. I’m curious what the author sees as the economic response by the industry in response to a higher minimum wage. If there is a high degree of monopsony, I would tend to agree with the policy being advocated. Hadn’t thought of that before. But does that break down if the firm’s production costs are raised above the cost of moving the plants to Mexico? You can either move the labor from Mexico to Iowa, or you can move the plants from Iowa to Mexico. Either way, the same demographic will be cutting the meat. I wonder at what point the higher labor costs exceed the basis involved with shipping animals to Mexico, and meat back to the States? As an Iowan, I prefer the immigration to Iowa over the export of production to Mexico.

The Jury Is In: Impact of Iowa Business Property Tax Cuts

May 31, 2016

Not quite like that

If you build a new CAFO on your land, your tax will increase. It’s not the same in every county, but figure 30% of net acquisition cost (unless things have changed in recent years). So, if you build a $1 million facility, your taxable valuation will increase, say, $300,000. However, the total assessed valuation for the county will not change. The assessed value for all acres in the county will fall by that $300,000. There is an argument to be made that CAFOs increase the average price per bushel, which increases the valuation. There are some problems with this idea I won’t get into here and now. For the most part, a CAFO will increase the CAFO owner’s valuation, but lower the valuation for other landowners in the county.

The Jury Is In: Impact of Iowa Business Property Tax Cuts

May 31, 2016

RE: Agland Taxes

Thanks, Dave. I’ve been thinking of writing one up just on the agland tax issue as well. The tie to residential won’t have any impact for a very long time, even longer now that the max TV increase was lowered to 3%. The farmers have done a better job reducing their tax burden than anyone else, with the possible exception of utilities. There is one very curious feature that you touched on that is particularly interesting. The law says that ag land and ag buildings are both to be taxed on their productivity value. But they are not. Rather, the formula that is used to assess ag property only takes into account the land value. That is a countywide total assessment, and then it is apportioned to all the land and buildings in the county. If a new CAFO is built, all that does is reduce the valuation on the land. The law doesn’t read that way at all. In my judgement, the application of the formula is completely contrary to the law. To my knowledge, it has never been challenged.

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