Iowa

Asset Outcomes

Iowa ranks 1st in the nation on Asset Outcomes. Its success is broad-based, with strong outcomes in most measures of asset accumulation and distribution. For example, Iowa has not only the 5th-highest average household net worth, but also the lowest rates of asset poverty and households with zero net worth. Iowa also ranks high on most measures of human capital accumulation and distribution?landing in the top 10 nationwide in basic educational proficiency in both math and reading and ranking 11th in the category of adults with at least an associate?s degree. In addition, Iowa is among the 10 states with the lowest gaps in college attainment between rich and poor, whites and non-whites, and males and females.

Iowa?s performance shows more mixed results in homeownership capital accumulation. The state has the 6th-best homeownership rate and the 5th-lowest gap in homeownership between rich and poor. Yet, the state ranks 46th in homeownership by race, meaning that non-white-headed households have low homeownership rates relative to whiteheaded households. Finally, asset protection in the form of health insurance is also a bright spot, with Iowa having the 12th lowest percentage of uninsured low-income children and the 4th-lowest percentage of low-income uninsured parents.

Asset Policy

Iowa earned an above average B in Asset Policy, ranking 14th among all states. The state does a good job of helping families to build ?nancial assets, with a state Earned Income Tax Credit and a fairly high income tax threshold, which allow low-income taxpayers to pay less in income taxes and have more to save. Iowa has also been at the forefront of the new movement to provide wealth-building incentives for low-income households and was the first state to enact Individual Development Accounts legislation.

Iowa also has strong policies to support human capital accumulation, ranking 1st in customized job training investments per capita, 8th in need-based financial aid, and among the top 20 in K?12 expenditures and investments to equalize per-pupil spending among all the state?s school districts.

Iowa also performs well on asset protection policies. With the 4th-highest unemployment insurance benefits and the 20th-highest workers? compensation benefits, Iowa does well in protecting wages from injury or job loss. Iowa also does a good job of protecting households from large medical costs that can deplete assets. For example, the state has been relatively aggressive at expanding health coverage to low-income working parents using Medicaid. In addition, Iowa is also one of nine states to offer subsidies for small businesses to offer health insurance to their employees.

Tax Policy and Accountability

Iowa performs well on tax policy accountability. The state prepares a tax expenditure report that itemizes the value of revenues foregone via tax breaks and makes the report available on the web. The state also has some capacity to determine the impact of state taxes or changes in the tax code on all taxpayers, but this capacity is still limited.