Will Iowa finally do something about it’s horrendous income tax? Governor Branstad provided a glimmer of hope, according to the Quad City Times’ Rod Boshart (my emphasis):
Gov. Terry Branstad said Monday that any legislative effort to raise the state’s gas tax would be contingent on Iowa lawmakers approving tax relief for property owners and income earners.
Branstad told reporters he intends to advocate for a reduction in the commercial/industrial property tax rate, a limitation on increases to residential and agriculture property tax rates and a reduction in Iowa’s individual and corporate income tax rates once the newly elected members of the 85th Iowa General Assembly convene their 2013 session next January.
So what does that mean? It doesn’t sound like a bold call to reform Iowa’s high-rate, high-loophole income tax. It sounds more like a trial balloon to tie a gas tax increase to income tax rate cuts; the rate cuts, possibly trivial, could provide political cover for a gas tax increase. I hope I’m wrong.
Be bold, Governor! Go big! Go for the Quick and Dirty Iowa Tax Reform Plan!
Meanwhile, it’s business as usual on the Iowa corporate welfare front. The Iowa City Press Citizen reports:
Development on the Iowa River Landing is moving full steam ahead in Coralville, aided recently by up to $2 million in state tax credits for four companies developing portions of the mixed-use development along Interstate 80.
The Iowa Economic Development Authority board approved the grants at a meeting Friday as part of its Brownfield and Grayfield Redevelopment Tax Credit Program, a series of tax credits the state doles out annually to redevelop properties around the state with environmental issues or other hindrances to development.
A Grayfield is an industrial or commercial property that already has infrastructure, such as a building, in place, but whose use is outdated, Iowa Economic Development spokesperson Tina Hoffman said. Tax credits for Grayfields can be for up to 12 percent of the qualifying investment.
“Grayfields” then means “just about any place that has ever been developed.”
If a building doesn’t need government help to be built, it shouldn’t get it. If it does need government money, it probably has no business going ahead in the first place. The buildings developed with government help will compete with those already in place and paying taxes to help subsidize the new ones.
Related: State 29, Live By The Tax Credit, Die By The Tax Credit
Yesterday we noted how the IRS is being swindled to the tune of billions by petty thieves in Tampa. News of another criminal mastermind who outwitted Doug Shulman’s IRS to get taxpayer cash comes out of Chicago:
The Department of Justice says 41-year-old Katrina Pierce was sentenced in federal court Monday. She pleaded guilty in January to fraud and aggravated identity theft.
The department says Pierce used a collection of stolen identities to defraud the Illinois Department of Human Services of more than $146,000 in child-care benefits between 2006 and 2010.
Pierce also filed about 180 fraudulent income tax returns from the 2006 and ’07 tax years and collected more than $60,000 in refunds.
We aren’t dealing with criminal geniuses here, but they are smart enough to fool Doug Shulman’s IRS for billions of dollars. Remember, each of those 180 fraudulent returns come at the expense of a victim like Jason Dinesen’s client, who gets the IRS runaround while the thief gets her cash.
Thinking about a ring? The Tax Policy Center has some advice for the lovelorn with TPC’s New Marriage Bonus and Penalty Calculator! (TaxVox)
Still not sure? The Tax Policy Blog’s Monday Map asks: Does your state have a marriage penalty?
TaxGrrrl, Romney’s ‘Number’ Is 13.9: What’s Yours?
Anthony Nitti, Leave Romney Alone:
This is who Mitt Romney is, at least in part: a rich guy with rich guy tax problems and rich guy tax solutions. Romney wasn’t obligated to pay any more tax than the law required, and he very likely didn’t. His refusal to overpay the government shouldn’t be an indictment on his ability to lead a government.
Jack Townsend, Judge Apportions Restitution in a Massive Tax Shelter Case:
Judge Baer of SDNY imposed restitution against one of the individual defendants in the massive BDO Seidman tax shelter case, but apportioned the restitution so that the defendant, who pled to a conspiracy count for the large conspiracy, is liable for only a portion of the tax loss.
Russ Fox: Not Only Were the Employees Outsourced, The Taxes Went Away, Too. An “professional employer organization” that let employers outsource their payroll function is accused of swindling clients out of their payroll taxes:
From San Antonio comes word of a company that allegedly took care of small businesses’ taxes in a way that’s, well, arresting. John Bean apparently owned a professional employer organization named “Synergy Personnel.” Most PEOs become the actual employer and, for a fee, they relieve a small business of the duties of personnel including the payment of taxes. Mr. Bean’s company allegedly had a unique and (if proven) very illegal method of dealing with those taxes: They didn’t. The FBI and IRS allege that Mr. Bean’s company kept the money for taxes and workers’ compensation insurance.
The IRS will still want the taxes from the company’s clients. Cases like this remind us how wise it is for employers to set up with EFTPS, the Electronic Federal Tax Payment System, even if they outsource the payroll function. You can go online with EFTPS and make sure your tax deposits are really going to the IRS. Nobody wants to pay their payroll taxes twice. If your PEO arrangement doesn’t support this, you are taking a potentially-expensive leap of faith.
Robert D. Flach, OUR PPACA IS HERE TO STAY (AT LEAST FOR NOW)
Kay Bell, 401(k) fee disclosure info due Aug. 30
William Perez, IRS Offers Tips for Correcting Tax Returns
Crisis! Peter Luger: Steak Prices May Soar As Drought Culls Herds. (via Going Concern).