Representatives of a new group pushing to replace Iowa’s varied income tax rates with a single “flat tax” are lobbying at the five Republican party district conventions being held around the state today. Kevin McLaughlin,founder of “Iowans for Discounted Taxes,” will be among those passing out a three-page pamphlet to republican delegates meeting in Dubuque, Iowa City, Ames, West Des Moines and Council Bluffs.McLaughlin says by establishing a flat tax, Iowa would benefit in the same way discount chains like Wal-Mart rack up the profits. By charging less on frequently-purchased items, the stores draw more customers and wind up making more money. McLaughlin argues Iowa would draw more residents if it has a single-rate income tax that’s lower than other states. He calls it “discounting” taxes.McLaughlin and his wife formed “Iowans for Discounted Taxes” last fall, when magazine publisher Steve Forbes signed on as the group’s honorary chairman. Forbes made the so-called “flat tax” a centerpiece of his republican presidential campaign, and now McLaughlin is hoping his new group can push the tax change at the state level. McLaughlin says a Beacon Hill Institute analysis concluded a “flat tax” would create three times as many jobs in Iowa than the new state economic development grant program — the Iowa Values Fund — which is handing out millions to businesses that expand in Iowa. A liberal think-tank known as the Iowa Policy Project says a flat tax would be a tax shift and would dramatically increase the burden on lower income Iowans to significantly reduce taxes for high income Iowans.
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