The Governor abandoned a plan to allow taxpayers to choose between the current byzantine Iowa income tax and a lower-rate version with fewer deductions and no deduction for federal taxes paid even before the session started. He instead will focus on lame feel-good initiatives in an election year, reports Omaha.com:
Gov. Terry Branstad is set to unveil his agenda Tuesday during the Condition of the State address. He said his priorities will include expanding broadband Internet access, fighting school bullying and curtailing student loan debt.
The Governor’s opposition will block any tax reform that isn’t sufficiently punitive to the “rich” — which means any reform worthy of the name. They will try to change some of Iowa’s worst corporate welfare giveaways, reports the Des Moines Register, but the Governor, an inveterate smokestack chaser and ribbon-cutter, can be expected block any restrictions on using your money to lure and subsidize your competitors.
Meanwhile, trial balloons about increasing the gas tax have already deflated. That means we can expect a quiet session on the tax front, and a continuation of Iowa’s insanely complex and worthless tax system for another year. But if they change their minds and want to do something useful, it’s always a good time to talk about The Tax Update’s Quick and Dirty Iowa Tax Reform Plan.
Tax Fairy seeker loses appeal. A South Dakota surgeon who looked across the ocean for the Tax Fairy found only grief — and the grief wasn’t alleviated on appeals. The Eighth Circuit Court of Appeals last week upheld the conviction that led to a five-year sentence for Dr. Edward Picardi.
The doctor used a scheme where he “leased” his medical services to an offshore company he controlled to artificially reduce his income by stashing earnings in offshore accounts. The scheme was promoted to him by an attorney-CPA who has been acquitted of criminal charges in another employee leasing case.
Other taxpayers have avoided fraud penalties from employee-leasing to offshore entities (see here), but not taxes and penalties. When the best you can say about a tax plan is that you avoided fraud penalties, it’s not much of a plan. There is no tax fairy.
Prior coverage here.
Kay Bell has Important January tax dates, deadlines
Lyman Stone, Should Nebraska Follow the Example of Illinois or Indiana? “The case of Illinois is a great example of how higher taxes can contribute to a worsening business climate, which leads to less jobs.”
Annette Nellen, Marijuana and the Tax Law. Despite appearances, there is no evidence the lawmakers are smoking something when they write tax laws.
TaxGrrrl, Top 10 Most Litigated Tax Issues. Number one is penalties.
TaxProf, The IRS Scandal, Day 249
Robert D. Flach offers a SPECIAL OFFER FOR ITEMIZERS!
TaxTrials, Famous Fridays: Wesley Snipes, A Lesson in Listening to Bad Advice. Did he ever.
The Critical Question: Massages May Feel Nice, But Can You Deduct Them at the Poker Table? (Russ Fox)
News from the Profession: KPMG Upgrades Its Female Interns From Necklaces to Camisoles (Going Concern)
Tags: Annette Nellen, Branstad tax policy, Going Concern, iowa tax policy, Kay Bell, Quick and Dirty Iowa Tax Reform Plan, Robert D Flach, Russ Fox, tax crime, tax fairy, Tax Trials, TaxProf, The Critical Question