The Tax Update comes to you today from Denison, Iowa, birthplace of actress Donna Reed. It’s also the fertile ground from which sprang the fertile imagination of Kennedy assassination figure Jim Garrison.
Today Denison hosts the seventh session of the Iowa State University Center for Agricultural Law and Taxation Farm and Urban Tax School. I’m helping out with the Day 1 panel. The last session is in Ames next Monday (register now!). If you can’t be there in person, that session will also be webcast.
Congress wants to finish up its year Thursday, reports The Hill. This article says the Senate is expected to take up the “extenders” bill before it goes home. This could mean that Majority Leader Reid’s comments last week that he might be too busy to bring up the bill are no longer operative. I hope so.
This post from the Tax Policy Blog lists all of the extenders passed by the House last week in HR 5771. The bill revives these provisions through the end of this month, retroactively to the beginning of 2014. Prominent among them are the $500,000 Section 179 limit, 50% bonus depreciation, the research credit and the five-year limit on built-in gains. The bill also includes individual provisions like the exclusion for IRA donations for charity and the deduction for educator expenses and the non-business energy credit.
Paul Neiffer, Senate to Vote on Tax Extenders on Wednesday?
Income tax reform will be high on the agenda when the Legislature convenes in January, although many details have yet to be hammered out, key lawmakers said Friday.
However, Democratic and Republican legislative leaders told the Iowa Taxpayers Association they are welcoming a debate on revising Iowa’s income tax system.
This paragraph from the story is why I don’t expect much to happen this session:
State Rep. Tom Sands, R-Wapello, chairman of the tax-writing House Ways and Means Committee, said his preference would be to examine corporate and individual income taxes while exploring ways to simplify the tax system. Senate Majority Leader Michael Gronstal, D-Council Bluffs, said any tax cuts should be focused on helping middle-class Iowans.
Nor does this bode well:
“If it is only to say really rich people get a break that nobody else can use; no, it doesn’t pass muster,” Gronstal told reporters.
If you have to “explore” ways to simplify Iowa’s byzantine tax system, you haven’t looked very hard. The whole thing about “really rich” taxpayers could guarantee that any reform of Iowa’s high rates and complexity won’t pass muster with Senator Gronstal, which is the same thing as not clearing the Iowa Senate.
If they do want to get serious, though, they could do a lot worse than starting with The Tax Update’s Quick and Dirty Iowa Tax Reform plan, sweeping away vast swaths of deductions and crony credits, eliminating the corporation tax, and slashing rates.
Just a few quick links today:
Russ Fox, Speaking of Efficiency. “Imagine what would happen if every Congresscritter did their own tax returns by hand. The Tax Code would unanimously be shrunk four hours later.” I think they should have to do it on a live webcast with a running comments feature.
Robert D. Flach, EVERYBODY OUGHT TO HAVE AN IRA
TaxProf, The IRS Scandal, Day 578
TaxSlayer Bowl! Iowa’s highest-paid state employee will lead the 7-5 Hawkeyes to Jacksonville to compete with 6-6 Tennessee in the TaxSlayer Bowl. I understand the game will be played under standard college football rules. It would help the educational mission of the schools if they modified the rules to reflect the tax theme. If college football had rules like the tax law, we might see some different rules.
– Throughout the game, referees would audit completed plays, with the option of imposing penalties for infractions in the three prior games, with yardage charged in the current game.
– When the play clock runs down, the quarterback can call for one automatic extension.
– When calling an audible, the quarterback will have to request a change in method from the referee.
– When a penalty is called, the referees could not tell the opposing team what the penalty is for under confidentiality rules.
– Penalties can be imposed on coaches who are “responsible persons” with respect to the infraction.
– If you like your football, you can keep your football.