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February 07, 2005
Iowa May Waive Income Tax for Young Workers
Iowa loses more of its young, single, well-educated adults than any state except North Dakota. They're fleeing in such numbers, in fact, that demographers predict the state will face a drastic labor shortage within two decades.

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It has led lawmakers to consider waiving the state income tax for everyone under 30, the Los Angeles Times reports.

The proposal comes from the Republican leadership in the state Senate, which estimates that the move would save the average twentysomething about $12 a week. It would also cost the state treasury an estimated $200 million a year, but that's money well-spent if it persuades a few thousand more bright, ambitious young Iowans to stick around, according to the proponents.

"The ones like my 16-year-old daughter who say, 'I'm getting out of here as soon as I can' … well, there's probably nothing we can do to keep them," conceded Sen. Jeff Lamberti, a Republican legislative leader. "But we really have to get serious about this problem."

"Brain drain" has become a problem for all of the Great Plains states, with young people leaving for bigger cities, hipper crowds, and warmer weather, according to the Times. As in Iowa, their civic leaders are considering a variety of responses:

  • At least eight small towns in Kansas are offering free land to any family willing to try living on the prairie. The winters can be fierce and the cultural attractions sparse, but then again, a brand-new four-bedroom house costs less than $150,000, the Times reports.

  • Counties in northwest North Dakota are trying reverse psychology. A website they've set up describes the frozen frontier as too brutal for the typical suburban softy to handle. "Do you have what it takes to be a 21st century pioneer? Most don't," the website taunts. It goes on to admit that residents are looking to recruit 5,000 hardy new neighbors and asks whether "you just might make the cut."

  • Former Nebraska Gov. Mike Johanns held a job fair last year for University of Nebraska alumni living in Denver, wooing them with a video of young professionals who had happily traded the big city for the wide-open prairie.

In Iowa, skeptics of the tax-exemption plan say it will take much more than an extra $600 a year to keep the young from moving out. For one thing, there's nothing anyone can do about the winters there. For another, there's the 43 percent of young adults in a 1999 state poll who cited the lack of entertainment as their top gripe about Iowa.

But first on most locals' lists, according to the Times, is the lack of industry. In Whiting, a town of 707 in far western Iowa, many drive half an hour north to Sioux City or an hour south to Omaha, Nebraska, for work. Good jobs, not to mention fulfilling careers, are hard to come by in rural Iowa.

"All the tax exemptions in the world are not going to help if you don't have jobs," Whiting Mayor Nancy Brenden told the Times.

The tax-exemption proposal also draws skepticism from those raised on the Midwest ethos of self-reliance, according to the Times. They consider it wrong on principle to cut young adults a break just because they're young.

"Heavens, you bet they should pay. Why shouldn't they?" said Laura Reitan, 43, who owns the local hair salon. "That's the American way: You start working, you start paying."


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