Tax Roundup, 8/13/2012: Let the film credit revisionism begin! Also: a study in retirement planning.

August 13th, 2012 by Joe Kristan

http://www.rothcpa.com/misc/20090604-1.JPGStill Star-struck in Iowa.  Even after Iowa’s embarrassing and disastrous film tax credit fiasco, there are still people who think it’s a nifty idea for taxpayers to subsidize Hollywood, reports the Quad City Times.  Take Kent Newman, described as “a former board member with the Iowa Motion Picture Association who does production work in the Des Moines area and remains connected with various aspects of the film business.”:

 Newman said there were many positive aspects from the film tax credit program that included considerable training for young people interested in working in the entertainment industry and several projects that successfully used the tax incentives to complete high-quality productions. However, when the incentive program was suspended in 2009 many projects and people moved to Michigan, Louisiana and other places where there were jobs being offered.

An interesting observation.  Iowa spent $32 million, of which $28 million was pretty much pure waste and/or fraud, based on the state auditor’s report on the film program.  For that we trained people who moved away.  Success!

Newman said in the current environment that “unless and until Iowa has some level of a competitive incentive program that is well managed, we’re never going to have very much production happening here.”

He said he was hopeful local communities would fill in that void by offering to waive the first month of hotel-motel tax for production crews or other incentives that could entice film projects in the range of $3 million to $10 million that would headquarter in an Iowa city where they would be a short distance from rural locales that would be prime destinations for a film shoot.

In other words, unless we pay Hollywood to be our friends, they won’t like us.  Unless every business and employee who is already paying taxes here working for unsubsidized businesses ponies up tax money to bribe the filmmakers to come here, they won’t come here.

If Hollywood wants to make movies here with their own money or money from private investors, fine.   We should have a business environment that is welcoming to in-state and out-of-state entrepreneurs.   Then you don’t need “incentives” in the first place.

 

It doesn’t make sense to bribe other businesses either.  Some wisdom on Tax Policy from David Brunori ($ link): 

As first reported in the Las Vegas Sun, Nevada’s decision to grant Apple $89 million in tax breaks was made by one man. The decision rested with Steve Hill, the state economic development director. Where would one unelected bureaucrat get the power to hand over $89 million to a corporation that has a market capitalization of over $500 billion? Why would Nevada give a dime to a corporation that has revenue of over $110 billion and profit of $26 billion?

     In a society that has laws against everything, you’d think there would be some prohibition against handing over public money to fabulously successful private enterprises. Nevada politicians claim that Apple will hire 35 (yes, 35!) employees. Apple will also invest $2 billion over the next 30 years. But the truth is that Apple would have invested in Nevada even without the tax breaks. That’s almost always the case when states give incentives to individual businesses.

And don’t get me started on wind tax credits.

 

Sure they’re humble nowHumble church founders convicted of tax fraud. (Chron.com).

Assisted living would have been cheaper.  A user of the absurd “1099-OID” tax refund scheme faces expensive but substandard retirement living, according to a Department of Justice Press release:

Richard Kellogg Armstrong, 77, of Prescott, Ariz., was sentenced today by U.S. District Court Judge Robert E. Blackburn to 108 months in prison followed by three years of supervised release.  Judge Blackburn ordered the sentence to run consecutively to the 660 day prison term and $1,021,500 of fines cumulatively imposed upon Armstrong as punitive sanctions for 10 acts of contempt of court. He also ordered Armstrong to pay restitution to the Internal Revenue Service (IRS) in the amount of $1,678,834 and to forfeit two residences and a personal aircraft.

He gets to start over when he’s 86.  That’ll be fun.

The 1099-OID scheme claims that one way or another the government has a bunch of money for you that you can claim by dummying-up a 1099-OID showing withholding for you.  Wikipedia covers it here.   You can see an item advocating it here, but good luck trying to make any sense of it.

 

Jim Maule watches People’s Court and ponders tax and other implications.

Jana Luttenegger, Taxing Gold Meals (Davis Brown Tax Law Blog)

It’s Romney-Ryan,and the tax bloggers are on it:

Kay Bell, Don’t look for GOP vice presidential nominee Paul Ryan’s tax returns either

TaxGrrrl, Romney, Ryan and Reagan: The Winning Team?

Anthony Nitti, What Does Paul Ryan Mean For Potential Tax Reform?

Tax Break, Essential reading: Attack targets Romney’s role in Marriott tax deals, and more

Peter Reilly: Son Of Boss – Don’t Blame Romney Blame His Tax Pros

Robert D. Flach keeps Buzzing his roundups of tax blog posts from his new Pennsylvania lair.

Finally, Russ Fox tells us that the Accountant Who Solicited Hit Man Pleads Guilty:

Back in March I reported on Steven Martinez.   Mr. Martinez is a tax preparer who faced charges of stealing $11 million from clients.  He decided that the best strategy to fight this charge wasn’t hiring a good attorney, nor was it trying to disprove the charges; rather, he decided to hire a hit man to kill four witnesses.  (One reason he didn’t try to disprove the charges is that they were true; Mr. Martinez has admitted he took the $11 million and used it to buy a home in Mexico and other personal expenses.)

The only saving grace about criminals is that their stupid usually undoes their evil.

Share

Tags: , , , , , , , , , , , , ,