Group discusses "fair" taxes

A private advocacy group is holding meetings around the state to discuss ways to make taxes more fair and understandable. The director of the Iowa Public Policy Group, David Osterberg says the state loses out on some money because of “combined reporting,” a loophole that lets chain stores evade state income taxes. He says a store like Toys-R-Us can cut its taxes by sending part of its profits off to a state like Delaware where it has other branches. The group charges that big companies set up headquarters, though they’re often little more than post office box addresses, in states with no corporate taxes. As an example, he cites the giraffe mascot Jeffrey that represents the big toy store chain. “Jeffrey, Inc” doesn’t do much, he says, except send money off to a state where its profits aren’t taxed, and that makes Iowa unable to levy taxes on profits from the Iowa stores in the chain, which Osterberg says could be bringing the state more than 20-million dollars. Osterberg, who’s also a professor in public health at the University of Iowa, says the group’s analyzed tax bills introduced during the last legislative session and will expect to see some come up again.He says another cigarette-tax proposal’s likely to come up, and as a public-health advocate he’d like to see that. Osterberg says he’d like to see the tax spread out more. He says it’s an unfair way of raising money, because more poor people than wealthy people are smokers, so to “reduce the hurt” to low-income people, he says some other part of the tax system should be changed around. Osterberg says if a flat-tax proposal returns, it’ll be important to remember that low-income Iowans pay a larger portion of their income in taxes now than wealthy Iowans do. Another meeting in the series, held in conjunction with the Child and Family Policy Center, will be Wednesday night in Des Moines, in Machinist Hall.