When they built the big new racetrack in Newton, they had a unique deal: the track got to keep the sales tax it collected. The deal was crafted to require the track be partly owned by Iowans, and that it would expire at the end of 2015.
Then NASCAR bought the track. NASCAR is controlled by a wealthy North Carolina family , with nary an Iowan. No problem! The Iowa House sent a bill to the Governor yesterday (SF 2341) repealing the Iowa ownership rule and extending the subsidy through 2025.
Representative Tom Sands, a Republican from Wapello, said it’s a “performance based” tax break because NASCAR won’t get the rebate unless there are on-site sales.
“One of the questions might be: ‘What kind of return do we, taxpayers, get in the state of Iowa?’ And I drive on Interstate 80 twice every week like many of you do coming to Des Moines and have seen the construction that has happened around that Speedway just since it’s been there,” Sands said, “and we’ve got probably lots more of that we can expect into the future.”
The answer to that is: what makes this private business more worthy to keep its sales taxes than anyone else? It’s a special deal that every other Iowa business competing for leisure dollars doesn’t get. It’s the government allocating capital, and if anybody thinks the state is good at that, I’d like my Mercedes, please.
While this corporate welfare passed, at least some legislators are starting to wonder about this sort of thing. 14 representatives joined 9 state senators in opposing the bill. When the Iowa Film Tax Credit passed, there were only three lonely opponents. The 14 representatives who stood up for the rest of us: Baudler (R, Adair), Fisher (R, Tama), Heddens (D, Story), Highfill (R, Polk), Hunter (D, Polk), Jorgensen (R, Woodbury), Klein (R, Washington), Olson (D, Polk), Pettengill (R, Benton), Rayhons (R, Hancock), Salmon (R, Black Hawk), Schultz (R, Crawford), Shaw (R, Pocahontas) and Wessel-Kroeschell (D, Story). Maybe we have the makings of a bi-partisan anti-giveaway coalition.
Jason Dinesen, Iowa Tax Treatment of an Installment Sale of Farmland By a Non-Resident. ”The capital gain is recognized in the year of the sale and is taxable in Iowa. But what about the yearly interest income the taxpayer receives on the contract going forward?”
Paul Neiffer, Painful Form 8879 Process is on its Way. The IRS, which has forced us to go to e-filing, now plans to make it a time-consuming nightmare for practitioners and clients because of the IRS failure to prevent identity theft.
Margaret Van Houten, Digital Assets Development: IRS Characterizes Bitcoin as Property, Not Currency
William Perez, Tax Reform Act of 2014, Part 2, Income
These data indicate that:
54 percent of total partnership and S corporation taxable income in Illinois would be impacted by Speaker’s Madigan’s millionaire surcharge. That’s almost $10 billion of business income.
6 percent of sole proprietorships AGI would be impacted. Important to note here is that not all sole proprietorships earn small amounts of income. Over three thousand would be hit by the millionaire tax, impacting $674 million of income.
Taken together, this indicates that 36 percent of pass-through business income is earned at firms with AGI with $1 million or more.
I don’t think this will end well for Illinois. When you soak “the rich,” you soak employers. When states do this, it’s easy to escape.
Christopher Bergin, Good Grief! Tax Analysts v. Internal Revenue Service (Tax Analysts Blogs)
I have been involved in two Tax Analysts FOIA lawsuits against the IRS. Neither one of them should have gone to federal judges. But the IRS’s secrecy, paranoia, and belief that it has the absolute right to hide information drives it in this area. This lawsuit was a waste of time and money – against an agency that argues that it doesn’t have enough of either — over documents that should have been public from the beginning.
I’m left to quote Charlie Brown: Good grief! What an agency.
Commissioner Koskinen’s pokey response to Congressional document requests needs to be considered in this context. The IRS has not earned the benefit of the doubt.
Greg Mankiw, Not Class Warfare, Optimal Taxation:
Today’s column by Paul Krugman is classic Paul: It takes a policy favored by the right, attributes the most vile motives to those who advance the policy, and ignores all the reasonable arguments in favor of it.
In this case, the issue is the reduction in capital taxes during the George W. Bush administration. Paul says that the goal here was “defending the oligarchy’s interests.”
Note that when Barack Obama ran for President in 2008, he campaigned on only a small increase in the tax rate on dividends and capital gains. He did not suggest raising the rate on this income to the rate on ordinary income. Is this because Barack Obama also favors the oligarchy, or is it because his advisers also understood the case against high capital taxation?
Leigh Osofsky, When Can Concentrating Enforcement Resources Increase Compliance? (Procedurally Taxing)
Cara Griffith, Taxing Streaming Video (Tax Analysts Blog)
TaxProf, The IRS Scandal, Day 322
Renu Zaretsky, Friendly or Penalty? Taxes on Married Couples, Businesses, and the Uninsured (TaxV0x). Rounding up the tax headlines.
Jack Townsend, Scope and Limitations of this Blog: It Is a Tax Crimes Blog, not a Tax Crimes Policy Blog. ”I conceive my blog as a forum to discuss the law as it is, including how it develops. It is not a tax policy blog addressing issues of what the law ought to be.”
Russ Fox, Bozo Tax Tip #9: 300 Million Witnesses Can’t be Right. Richard Hatch is not widely considered a tax role model.
News from the Profession. Frustrated EY Employee Vandalizes Office Breakroom in Protest Over March Madness Blocking (Going Concern)