Via Wikipedia
Legislator insists that thieves get $11 million as price of property tax deal. As Iowans pay their 2012 balances due on today’s state income tax deadline, they may want to take a moment to ponder how careful the legislature is about spending the money they are sending in.
The Des Moines Register reports that Senator Joe Bolkcom demands an increase in the Iowa earned income credit as the price of a property tax bill:
Sen. Joe Bolkcom, D-Iowa City, chairman of the tax-writing Senate Ways and Means Committee, spoke at a Statehouse news conference sponsored by The Coalition for a Better Iowa, which released a booklet with the stories of Iowans who have been helped by the earned income tax credit. About 200,000 Iowa working families receive the tax credit, which assists households with incomes under $45,000.
Senate Democrats want to raise the earned income tax credit from 7 percent now to 20 percent at a cost of about $55 million annually.
Both Sen. Bolkcom and the Register fail to mention the massive fraud rate of the earned income tax credit. The Treasury Inspector General for Tax Administration this month reported:
The IRS estimates that 21 to 25 percent of EITC payments were issued improperly in Fiscal Year 2012. The dollar value of these improper payments was estimated to be between $11.6 billion and $13.6 billion.
Applying that fraud percentage to Sen. Bolkcom’s proposal will result in $11.5 million to $13.75 million in “improper” — mostly fraudulent — Iowa EITC payments. Remember that the EITC is a “refundable” credit, which means that if it exceeds your tax, the state writes you a check. It’s a spending program, a welfare program.
I would say it takes a special kind of legislator to demand $55 million in spending knowing that it’s an appropriation of at least $11 million to thieves, but really it just takes a run-of-the-mill legislator spending your money instead of his own.
The EITC as a poverty trap: phaseouts of the benefit impose stiff marginal tax rates on the working poor.
Only somebody who doesn’t prepare tax returns would say something this stupid. The TaxProf links to this from a University of Wisconsin academic:
This Article analyzes the ongoing structural transformation by observing and explaining the advantages that accrue from pursuing social and regulatory objectives through the tax code. In particular, this Article identifies a number of legislative and normative advantages that tax-embedded policies offer.
The tax law has one important job: to raise revenue. If this author had ever done business tax returns for a living, she would know what a challenge it is to simply determine taxable income. If she had ever helped a client through an IRS audit, she would know how difficult it is for the agents to simply work through the accounting, let alone run a bunch of social programs on the side. The author should be made to spend three years working at a storefront tax prep business to learn the chaos her views cause outside the faculty lounge.
Tony Nitti, Overview Of The New 3.8% Investment Income Tax, Part 2: Passive Activities
Jeremy Scott, Baucus, the Marketplace Fairness Act, and Tax Reform (Tax.com):
Baucus’s shift to the right in the last few months (which people had assumed was positioning for the election next year) has antagonized more than just progressives. It seems his Senate colleagues are growing frustrated as well.
And that will severely hamper the chances that a major tax reform bill will make it to the Senate floor.
Judge Sentences Widow to Less Than a Minute of Probation in Tax Case (Accounting Today)
TaxGrrrl, Willie Nelson, Who Saved His Career And His House With The IRS Tapes, Turns 80
Nanette Byrnes, Republicans pursue tax reform, and more (Tax Break)
Brian Strahle, STATE TAXES: WHAT WILL MAKE YOUR COMPANY CHANGE – CHOICE or AUDIT NOTICE? On not being in denial about your exposure to business taxes in other states.
Jack Townsend, a criminal tax defense attorney, offers some wise advise in Tips to Avoid an IRS Criminal Investigation or, Worse, a Tax Grand Jury Investigation
It’s time for Robert D. Flach’s Tuesday Buzz!
Always heed tax policy advice from a violent cannibal boxer. Boxer Mike Tyson TKOs Fox host with talk pro-tax talk (Kay Bell)
Martin Sullivan, To Balance the Budget: Tax Sex Appeal (Tax.com) Yes. by all means cut my taxes.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=58ebc38e-5399-4d94-acce-04f1d03df44f)
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
