Early this summer, Mike Lipsman, the former top tax analyst at the Iowa Department of Revenue, wrote an article for The Des Moines Register’s opinion page that proposed “seven ways to solve Iowa’s tax problem.”

His suggestions made sense but were easy to ignore once lawmakers left town. 

The problems have not gone away, though, so it’s worth taking a deeper look at Lipsman’s ideas. 

He prefaced his article with a warning that Iowa’s “present tax system favors certain classes of individuals and businesses over others.” Notably, he wrote, “it favors out-of-state businesses over Iowa-based businesses.”

That’s the kind of statement a populist political candidate might make.

But Lipsman is not a political candidate, nor is he a populist. He’s a guy who spent decades crunching Iowa’s financial numbers in a totally nonpartisan fashion for the state’s top policymakers. 

It didn’t matter whether his bosses were Democrats or Republicans, Lipsman provided the best information he could to the people in charge.

He helped design many of the reporting systems that are used today, and I’d venture to say that even though he retired several years ago, he’s still one of the most knowledgeable people around when it comes to understanding state finances. As the revenue department’s top tax analyst he had access to sensitive tax information that few people see.  

As for Lipsman’s seven solutions regarding state taxes, not all of them are politically feasible.

For example, I can’t imagine a scenario that would eliminate the 100 percent tax exemption for Social Security payments. But Lipsman said dialing it back to the pre-2007 level of 50 percent would generate about $90 million a year from higher-income households.

He also said that an increase in the statewide minimum wage from $7.25 to $12 an hour would solve several problems, including reducing the amount of earned income tax credits claimed by low-income Iowans.

Two other proposals — eliminating federal tax deductions from Iowa’s personal and corporate income tax — are aimed more at perceptions than increasing revenue. The deductions are offset by tax rates that are higher than they need to be and which give Iowa the image of a high-tax state, Lipsman said.

But like the Social Security exemption, lawmakers aren’t likely to change the minimum wage or the federal tax deductions anytime soon.

Lipsman’s remaining three proposals make the most sense from a fairness standpoint and because the additional revenue they would raise would come from non-Iowa businesses that have been getting, in effect, a free ride.

Lipsman proposes leveling the playing field for retailers by making all internet companies with sales to Iowans collect and remit sales tax. That’s an idea whose time has come and could deliver an estimated $200 million in tax revenue.

He also wants to plug holes in Iowa’s corporate income tax laws that allow out-of-state businesses to game the system by shifting revenues out of Iowa and costs into the state. The current law places Iowa corporations at a competitive disadvantage and costs the state as much as $100 million a year in revenue, Lipsman said.

A similar problem exists with the state’s bank franchise tax, which allows regional and national banks to manipulate their ledgers to avoid taxes that Iowa banks have to pay, Lipsman said.

“Large regional and national banks control more than 40 percent of Iowa bank deposits,” he said. If they were taxed on a level field with Iowa banks, he said, the state “could generate $20 million or more in additional franchise tax revenue.”

Those three changes alone would add more than $300 million a year in revenue, which is roughly the shortfall for the 2017 fiscal year that ended on June 30.