You've probably heard by now that escaped mental patient Michele Bachmann has suspended her campaign for president. While this is upsetting for many that stand proudly around the Bachmann couldron, the congresswoman should know that while voters all over Iowa were skipping over her name with ease last night, the Iowa City school district also […]
Once upon a time a little farm state was feeling sad. The state wasn’t poor. It wasn’t lonesome – strange, handsome and glamorous men were always courting her – but something was missing. What could it be?
Then a man whispered in her ear: you need glamor! And it’s in your grasp!
The little state blushed. “How can I, a little farm state, be glamorous like Hollywood?”
The man said: “You can buy glamour!” And he burst into song:
You’ve got glamor
Right here in River City!
Movies start with cash;
If I can be so brash;
Give me some tax credits!
We’ve relied on caucuses every four years to bring action and celebrities to town. Now, sightings are anytime, any place.
But something was wrong. The little state sensed amid the cocktail party laughter that the glamorous were laughing at her, not with her. She noticed that the glamorous people were driving away with shiny new cars that she was paying for. And she noticed that the tax credits were getting rather expensive.
So she cut off her tax credits. This made the glamorous people mad, and some of them sued her. But she caught some of the hapless glamorous people and had them locked up. She made the man who whispered in her ear about film credits confess that he had done a bad thing. She got mad at the man who handed out the tax credits for her and tried to put him in jail.
So the little state is sadder, but perhaps wiser. Which has an attraction of its own:
I flinch, I shy, when the lass with the delicate air goes by
I smile, I grin, when the gal with a touch of sin walks in.
I hope, and I pray, for a Hester to win just one more “A”
The sadder-but-wiser girl’s the girl for me.
The sadder-but-wiser girl for me.
The most noteworthy and damning moment of the GOP debate in Iowa Thursday was when the moderators asked the candidates to raise their hands if they would walk away from a deal that cut ten dollars from the deficit for every one dollar in tax increases. Every last person on stage said they’d reject that deal. [Atlantic]
From known tax credit antagonist, Joe Kristan:
Before the Iowa Film Tax Credit program exploded in scandal in September 2009, the state had granted $31,967,641 in transferable tax credits to filmmakers. Yesterday the State Auditor reported that $25,576,301 were issued improperly — a full 80% of the credits granted.
Quite the field of dreams. Read more over at Tax Update Blog.
What Are Your Taxes Buying Hollywood?
“I’m tired of pastors submitting to this tyranny — and I’m expecting to try to get the IRS to sue us so that we can take it all the way to the Supreme Court and restore freedom in America’s pulpits.”
~ Pastor Cary Gordon, of Cornerstone World Outreach in Sioux City, Iowa, has some strange ambitions.
SEC sues ex-Dell accountants over fraud [Reuters]
“The U.S. Securities and Exchanges Commission on Friday sued two former top accountants of Dell Inc for manipulating financial statements to meet Wall Street earnings targets between 2001 to 2003.
The regulator said in its suit, filed at the U.S. District Court of the District of Columbia, that former Chief Accounting Officer Robert Davis, and former Assistant Controller Randall Imhoff had maintained a number of ‘cookie jar’ reserves — an improper accounting method in a bid to cover shortfalls in Dell’s operating results.
The SEC said the improper accounting led to Dell having to restate all its financial statements from 20 g>Mosque big owes 224G tax [NYP]
“Sharif El-Gamal, the leading organizer behind the mosque and community center near Ground Zero, owes $224,270.77 in back property tax on the site, city records show.
El-Gamal’s company, 45 Park Place Partners, failed to pay its half-yearly bills in January and July, according to the city Finance Department.
The delinquency is a possible violation of El-Gamal’s lease with Con Edison, which owns half of the proposed building site on Park Place. El-Gamal owns the other half but must pay taxes on the entire parcel.”
States See Pickup in Tax Revenue [WSJ]
“Overall tax revenue increased 2.2% in 47 states that have reported their receipts for the three months ended June 30, compared with the same period a year ago, according to a report to be released Monday by the Nelson A. Rockefeller Institute of Government at the State University of New York.
This marks the second quarter in a row of recovering tax collections—and follows five quarters of declines in revenue that hammered local-government budgets. The latest figures are still a mixed bag: Some states continue to see declining revenue, but those were offset by states that saw increases.”
KPMG Accounting Malpractice Verdict Affirmed but $38 Million Damage Award Vacated [Law.com]
Is this what you call a lose/win?
Relax! Iowa Is Funding Hollywood Again [Tax Update Blog]
That is a relief. But Joe Kristan reminds us how things went the first time around, “The film program collapsed in scandal last fall, and the film office director and two filmmakers face criminal charges. Iowa is on the hook for $200 million for credits already committed — about $66 per Iowan. ”
An S.B.A. Loan Program Goes Quietly [You’re the Boss/NYT]
The Small Business Administration’s America’s Recovery Capital Loan program (“ARC”) is being shut down just after a year in operation. At the outset, the 10,000 that were going to made available was thought to be too small. As of August 20th, the program had made less than 8,300 loans and it will be lucky if it reaches 9,000 by the time it expires next month.
Starting a new school year [Accounting Professor]
Fans of Professor David Albrecht has started a new blog; this is the first post.
Obama’s Tax Reform Panel: A Missed Opportunity [TaxVox]
“The paper, approved by the panel this afternoon, is filled with lots of useful information about our flawed tax system but leads nowhere. There are no recommendations. No revenue estimates. And no ownership by President Obama, even though he picked the panel’s members and staffed it with White House aides.
As a result, this report is a huge missed opportunity. Obama might have used this exercise to jump-start a debate over fundamental tax reform. Instead, the report does nothing to fill the policy vacuum that is being filled by an argument over what to do about the decade-old Bush tax cuts.”
Welcome back, Joe.
More news out of the land of Quakers, as Pennsylvania has announced a tax amnesty program for delinquent taxpayers. The program allows tax deadbeats to pay their back taxes but all the penalties and half of the interest will be waived. Pennsylvania’s will begin on April 26th and be open for 54 days.
The AP reports that the state could generate an additional $190 million in revenues for the state which, like pretty every state, is in a dire need of revenues.
For those that participate in the amnesty program, they’ll have to be on good behavior going forward, “participants who fall into delinquency again within two years may be required to pay the full penalties and interest that had been waived. Also, once the amnesty period ends, a special, ‘nonparticipation penalty’ of 5 percent will be levied against delinquent taxes, penalties, and interest not paid in full.”
Participants will also not be eligible for future amnesty programs. Sounds like a novel idea right?
Well, maybe not.
Our resident tax guru, Joe Kristan, is not a fan of tax amnesty programs saying, “they become an expectation and they make chumps of compliant taxpayers.”
Joe’s home state of Iowa passed a tax amnesty program back in 2007 and his sentiments haven’t changed since then, “[Iowa is] adding more
loopholes targeted tax incentives to its tax law while doing nothing to lower rates or broaden the tax base.”
But Joe, being the silver lining-type, also notes, “those of us who charge for tax work by the hour, it truly helps our economic development during an otherwise slow time of year.” So tax pros will take those new clients despite the bad policy that encouraged them.
Regardless of the bump in off-season revenues, the Tax Policy Blog (who Joe cites) noted that these programs are of little value if reform doesn’t accompany it, “if lawmakers decide to implement tax amnesty programs, they should be accompanied by fundamental tax reform that makes the tax code simpler and easier to comply with.”
So it appears that tax amnesty is nothing more than a duct tape solution from a policy stand point but it certainly makes good pandering fodder in an election year.
Pa. will offer tax amnesty [AP via Philadelphia Inquirer]
The former head of the Iowa Film Office was charged this week with “unfelonious misconduct in office” for his role in a scandal in which filmmakers bought themselves everything from featherbeds to Benzes with money advanced by the taxpayers of Iowa.
The Hawkeye State fell big time for the film credit fad that swept the country in recent years. Iowa had two 25% tax credits, one for filmmakers and one for investors. As interpreted by Mr. Wheeler (but not the Attorney General), the credits together could add up to 50% of film costs incurred in state, making it perhaps the most generous such giveaway in the country.
Better yet, the credits are transferable, so filmmakers can sell them at a discount to raise money. The program had no caps, meaning that Iowa could give away money as fast as Hollywood could spend it.
The entire program was managed by Mr. Wheeler, almost by himself. And did he ever manage it. According to the Iowa Attorney General:
Defendant Wheeler permitted filmmakers… to utilize “payments in kind” including “services in kind” in support of claimed expenditures for tax credits. Under defendant Wheeler’s direction, Iowa’s film program became one of the few, if not the only, state film incentive program in the nation to allow credit for “services in kind.”…Examples included “sponsorship agreements” in which intangible assets (such as reciprocal web links, product placement and marketing agreements) were traded with no money changing hands. These non-cash “expenditures” sometimes constituted the majority of the filmmakers entire alleged budget.
For a brief glitzy moment, Iowa was overrun with film crews and starlets helping themselves to a bountiful harvest.
The party ended last fall with revelations that Iowans helped buy a Mercedes and a Land Rover for a producer via film credits. Mr. Wheeler lost his job, and now he stands charged with a “serious misdemeanor.” Two filmmakers are charged with felony theft for inflating their expenses while claiming credits.
But if Mr. Wheeler is criminally inept, what about the bosses that left him alone and unsupervised to give away over $30 million so far? And what about the 147 legislators — out of 150 — who thought it would be a good idea to give Hollywood a blank check? And you thought “Music Man” was fiction.
But lest you think too badly about the rubes in Iowa, forty-four states are giving taxpayer money to Hollywood. Chances are that your legislator is taking money from you and giving it to those nice Hollywood people. Remember that next time your legislator says you aren’t paying enough taxes.