Governor Branstad’s administration is making a big push to promote STEM education: Science, Technology, Engineering and Math. This headline in the Des Moines Register today shows how badly we need math education, especially in Iowa’s “Economic Development” bureaucracy:
165 jobs, $110 million in aid
Officials mull boosting incentives to keep $1.3 billion fertilizer plant project in Iowa
This is the worst kind of smokestack chasing, which is always the preferred approach of “economic development officials.” Never mind that Iowa already has competing fertilizer plants — as Sioux Citian Debi Durham, Iowa chief official economic developer, surely knows. Never mind that Iowa and Illinois are getting played shamelessly by Orascom, the fertilizer company. Never mind that the money comes from taxes paid by existing competitors, and by thousands of unsubsidized businesses like ours, and our employees. Never mind all that — it’s about buying a ribbon-cutting, not about making the state a good place for everyone to do business. Unless, of course, Roth & Company gets a nice state check for $21.3 million for the jobs we have already created.
At least some folks are catching on to the game. From the article:
Orascom has attracted a diverse group of opponents, from parents, environmentalists and liberal groups such as Iowa Citizens for Community Improvement and Iowa Policy Project, to conservative groups such as Public Interest Group, Lee County Tea Party and Americans for Tax Reform.
So there’s agreement from left to right that it’s a bad idea for the state. But if politicians think it’s a good idea for them, it will go through.
Related: Taking your wife’s purse to buy drinks for the girls and LOCAL CPA FIRM VOWS TO SWALLOW PRIDE, ACCEPT $28 MILLION
Who catches the identity thieves? Hint: it’s not Doug Shulman’s IRS. From the Bradenton (Florida) Patch:
Det. B. Pieper from the police department’s gang unit put together the case by paying close attention during a routine drug bust…
Pieper was one of several detectives watching traffic coming to and from a house where police suspected drugs were sold. He said he and his partner watched a car leave the house and then run a stop sign. When they pulled over the car Brydson was in the passenger seat with a laptop and a bag of marijuana on her lap.
Brydson quickly closed the laptop, which made Pieper suspicious. When he searched her purse, he said he found several TurboTax debit cards with different names on them. He also noticed a 60-step instruction sheet on how to perform tax fraud through TurboTax.
So local cops have to do the IRS’s job of stopping the thieves who take $5 billion of our taxes annually while the IRS is busy building a new preparer regulation bureaucracy at the behest of the national tax prep firms. Priorities!
Courtney A. Strutt Todd: Congratulations on Your Scholarship. Don’t Forget to Pay Uncle Sam (Davis Brown Tax Law Blog)
TaxProf, Tax Planks in Democratic Party Platform
Andrew Mitchel, Partnership Definition
Martin Sullivan, The Effects of Interest Allocation Rules in a Territorial System (Tax.com)
Linda Beale, Romney and Private Equity’s Questionable Schemes for Paying Very Little Tax
Kay Bell, Tax moves to make in September 2012
Robert D. Flach has a new Buzz roundup of tax blog posts.
Jim Maule offers A Peek at the Production of Tax Ignorance. It’s booming.
I think spending less than you earn works even better: Do Mandates or Tax Subsidies Do a Better Job of Boosting Savings?
Have a nice day: CBO: Federal Healthcare Spending Will Exceed Discretionary Spending by 2016 (William McBride, Tax Policy Blog)
GIGO: it’s Tax Court Doctrine! From a case rejecting a taxpayer’s use of TurboTax as an excuse for a bad return:
It is apparent that a portion of the information petitioner entered into the TurboTax program was incorrect; hence the mistakes made (which resulted in the underpayment) were made by petitioner, not TurboTax. TurboTax is only as good as the information entered into its software program. See Bunney v. Commissioner, 114 T.C. 259, 267 (2000). Simply put: garbage in, garbage out.
Tim Geithner, call your office.
Cite: Bartlett, T.C. Memo 2012-254.
Related: Reason #17 to Hire Me: Blaming Turbo Tax Can Not Protect You From Penalties (Anthony Nitti)
Tags: Andrew Mitchel, Anthony Nitti, Branstad tax policy, corporate welfare, Debi Durham, economic development, identity theft, Jim Maule, Judge Jacobs, Kay Bell, Linda Beale, Martin Sullivan, preparer regulation, Public Choice Theory, Robert D Flach, Shulman, TaxProf, Tim Geithner, Turbotax
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to
[...] The Tax Update’s Quick and Dirty Iowa Tax Reform Plan, Tax Roundup, 9/5/2012: Laying it on thick for the fertilizer plant. and Celebrate corporate welfare, I mean [...]
[...] provide tax credits which lower the effective tax rates for certain industries and/or investments, often for large firms from out of state that are considering a move. Policymakers create these deals under the banner of job creation and economic development, but the [...]
[...] In some ways tax reform would be a reversal of course for the Governor. He has continued the process of complicating the Iowa tax law with special breaks, enacting new carve-outs for ESOPs and proposing special breaks for “anchor manufacturers” while making a massive tax credit allocation to the new Southeast Iowa fertilizer plant. [...]
[...] also true at the state level; when you have to bribe businesses to locate in your state, as Iowa likes to, you have a sick tax system. Related: David Brunori, If the Shoe Fits: Oregon Lawmakers Get [...]
[...] opposing the subsidies are tools of the libertarian Koch brothers. Who knew? Prior coverage here. Related: LOCAL CPA FIRM VOWS TO SWALLOW PRIDE, ACCEPT $28 MILLION In other bad state tax policy [...]
[...] now Iowa seems to lead the world in fertilizing fertilizer companies with tax money. No doubt explosive growth is just down the [...]