Christian Fong: Comments Read at Federal Deductibility Hearing

 By Contributing Editor Christian Fong

 Federal Tax Deductability

The result of last night’s Public Hearing is now well-known. The mass media will, as usual, focus on the controversy and dissent. But the remarks I made were not to take personal aim at any lawmaker, but rather to encourage a rigorous discussion over why the income tax code must be reformed. I believe the current plan falls short of the mark, but am encouraged that many people, from grassroots to lawmakers, now understand that Iowa needs a tax revolution. We need change. We need leaders who will get us there. My full comments to the Iowa legislature are below.

Mr. Chairman, and other legislators, I’m honored to be here tonight – here among many friends on both sides of the aisle who serve faithfully and selflessly in this Chamber

My name is Christian Fong, from Cedar Rapids. I’m the President of Corridor Recovery, the non-profit which has helped lead flood recovery in Linn County. I’m also the Chairman of Cedar Rapids’ Small Business Task Force.

I’m not a partisan; I deal with facts. And the fact is that this plan will raise taxes. It would raise taxes on Iowans already hurting in disaster areas, and hurting in a recession.

In Cedar Rapids, the Small Business Task Force works hand in hand with businesses that are recovering from the flood. Unfortunately in Cedar Rapids, over 20% of flooded businesses have already closed – and will probably never come back.

Day after day, I have the privilege to talk to small business owners who feel a profound sense of loyalty and dedication to their employees. They will do nearly anything NOT to cut jobs. I see the data - margins are incredibly thin, for most sales are slowing and debt burdens are rising to "flood levels" to get through the recovery and the recession. As a result, we’re seeing businesses close nearly every week. The Small Business Task Force has estimated that about 7500 jobs are at risk in Linn County. The worst of it will come in years 2 and 3 – just when this proposal would begin significantly raising taxes by tens of millions of dollars.

Bottom-line, this "tax-on-a-tax" plan will cost us jobs. Not just a handful of jobs, but hundreds of jobs, and not just in Linn County, but across the state. A recession is the worst time imaginable to raise taxes.

I also am here to speak on behalf of the next generation of Iowans. I’m the Vice-Chair of the Generation Iowa Commission. I’ve spoken to many Legislators about the alarming outflow of young, educated Iowans. What the Commission discovered is that the root cause of Brain Drain is that our jobs for those with higher education don’t pay enough.

You see, wealth in Iowa is primarily driven by two things: Education and Work Ethic. From the next generation perspective, This plan is a tax on education, and a tax on hard work.

Jobs for educated Iowans – our dentists, accountants or engineers – already pay 15% less the national average for those jobs. It is the key cause of why our kids are leaving Iowa in droves. Let’s not add to the problem by raising taxes on the exact sorts of jobs that next generation Iowans are so eager to compete for. On behalf of the next generation, I’m asking that this bill go back to drafting stage. In its current form, I ask you to vote against it.

Thank you for tackling the difficult work of reforming the income tax code. It is a worthy project.

Comments

[RFP]

Well done Christian... Thanks for representing those of us who oppose this "tax on a tax". Thanks for your lucid presentation of the facts.

[Lisa Kuzela]

Too bad you don't use your position at the long term recovery to help HOMEOWNERS get back in their HOME. Quit using all the resources for the businesses. First the Greater Cedar Rapids Foundation gives all their money to businesses, and now our coalition of volunteer and resources give it all to businesses. Oh well. Who needs a HOME!?! GET YOUR VALUES RIGHT, Christian! Can our town be any more corrupt? You pat yourselves on the back because the downtown is coming back - DRIVE THROUGH TIMECHECK and ASK THE FAMILIES HOW THEY ARE DOING?!

[Christian Fong]

Lisa, I hear your frustration. I continue to work on behalf of homeowners too, often in less public ways. I was one of the handful of people that founded the Long Term Recovery Coalition last summer, whose sole objective is to help individuals get back on their feet. If you, or anyone you know, need additional help, please give them a call. You can find their contact info, and more resources dedicated to homeowners through CorridorRecovery.org

If you cannot find the information you need there, please contact me.

[Lisa Kuzela]

Christian,
The Long Term Recovery, partered with United Way, has taken advantage of grants of money that was meant for FLOOD VICTIMS.

As of last month, the LTRC had spent less than $300,000 for flood victims, yet spent over $400,ooo for staff of the $1.9 million it received from The Greater CR Foundation. When the head of United Way was asked why they're are sitting on $1.2 million and not using it to help the flood victims, her excuse was that if you helped, it would make them inelligible for other programs.
The FACT is that according to federal law, "duplication of benefits" does not include those handed out by non-profits. Besides, if this was the case, then why ask for all the money and use us as an excuse to get it if you can't spend it on us?

From a separate pot of money...It is August 2009, and I still find too many flood victims who do not know about the $2,500 unmet needs allowance that the governor signed on February 2nd (House File 64). In spite of having all kinds of volunteers offer to help allocate these funds, the money wasn't getting out. After whining about not having the money to hire help to get the grants out, in April the legislature finally gave $1 million for administration costs to allocate $10 million! (I wonder who will be contributing to their campaign. We SO need to have public financing of elections so these politians can't be bought anymore.) Yet, the volunteers are the ones who interview us anyway.

WHERE IS ALL OUR MONEY THE LTR AND UNITED WAY HAS GOTTEN? "Hearing our frustration" is not the same as taking action and DOING the right thing. The "additional help" we need is that LTR and United Way needs to spend OUR money on US.