Opponents of Indiana's tax amnesty plan have been gleefully observing that the state was behind in reaching its revenue goals, apparently without taking into account that, in every other state where amnesty has been offered, a great many tax delinquents waited until the last minute to take advantage of the offer. The same thing held true here, and the state has reached its goal, with several days of the amnesty offer still to go. And by the way:
Before this September, Indiana was one of only seven states that had never offered such a grace period.
Comments
I'm a critic of the tax amnesty program. I think it sends the wrong message. If the state never does it again, probably no serious damage is sustained. But, if it becomes a periodic thing, tax avoiders will have an incentive to wait for the next one.
I wouldn't necessarily be quick to call it a success either. The "goal" was more or less arbitrary. We can't make any meaningful assessment of the success of the program until we know 1) how much revenue is actually paid by tax debtors (promises to pay have a way of not working out); 2) how much revenue actually reaches the state general fund (after collection costs and whatnot are taken out); and 3) most importantly to me, how much debt was forgiven to collect the money. If we forgave $650 million to get $60 million, it wasn't such a good deal. If we forgave $5 million to get $60 million, it was a great deal.
One provision that's important to remember (without which I probably wouldn't have supported the plan) is that it's not JUST forgiveness. Those who don't take advantage of the amnesty are supposed to be gone after even more vigorously and will face even stiffer fines and penalties. The plan has both a carrot and a stick.
True. Unless another amnesty is granted. In which case, the stick will be largely meaningless. Which, it may be in any case. For whatever reason, the Dept. of Revenue hasn't been able to get the money out of these folks in the past. I'm not sure why they think they'll be able to get double the money out of them in the future. And, if they're correct in thinking so, why didn't we just apply those methods to getting the current balance due instead of granting an amnesty?
We'll see. I'd be happy to be wrong on this one.