OUR VIEW: Branstad veers left on ESOPs
Gov. Terry Branstad wants government to play a smaller role in the lives of Iowans – most of the time. But it sure is hard to resist tinkering with tax policies, no matter what your party or elected position.
The governor has proposed a way for the state to help employees buy the small-town companies they work for, as an alternative to a sale to an out-of-town or out-of-state buyer.
We’re all for Iowa companies remaining right where they are, but do we really need to add a dash of government involvement?
Branstad and Debi Durham, the state economic development director, want to grant business owners an exemption from capital gains taxation if they sell to their employees. They also want to set up a $1 million fund to help workers research employee stock ownership plans (ESOPs).
In past decades, we have added one program after another while saying “it won’t cost much compared with the overall budget” and “we need to do all we can to stay competitive.”
This, however, is a surprising proposal from the governor. It seems like just another example of the idea that government should dodge in and help out wherever it can – the opposite of the conservative philosophy.
We all want the state to provide a framework that allows small business owners to succeed. A business owner who has been around for a while knows what his or her end of the deal is. You take your final profit and pay a tax on it to the state government, which needs revenues to maintain a healthy economic climate for the business owners still to come.
Sure, it would be great to avoid the capital gains tax. There are a lot of fees and taxes that we all would like to avoid. The idea is that those fees and taxes are imposed for good reason and applied as intended.
Sometimes, as a conservative governor might say, we just need to let the marketplace function.