Tax amnesty

As predicted, it is very quiet in Richmond these days even though the General Assembly has been in session for one week. It’s tough to make noise in the State Capitol if there is little money at stake.

Yes, we have Delegate Bob Marshall’s code of conduct for lawmakers which has been placed on the back burner. And there’s Delegate Scott Lingamfelter’s school ethics posting bill or as we call it: The “I can’t believe it’s not the 10 Commandments” legislation. Then there’s a patchwork of bills designed to squeeze a little more money out of a flat lining state budget to build a few more roads or open a couple more DMV offices in Northern Virginia.

Other than that, things are pretty bland. Many people like it that way.

One bill that’s representative of a legislature with empty pockets is tax amnesty legislation proposed by Delegate Harry Parrish, R-Manassas, and Delegate Joseph P. Johnson, D-Bristol. This bill will no doubt pass the legislature in short order because of its potential to bring in some needed cash to fill the state’s budget shortfall.

The bill would give the state’s tax delinquents a chance to pay unpaid tax bills for the years prior to 2002. The legislation offers to waive penalties and half the interest assessed on the unpaid taxes. The state’s bean counters predict such an allowance would bring in around $44.3 million. Yes, the state is that desperate for cash.

The amnesty program could be up and running by next fall and run for a limited time allowing delinquent taxpayers to settle their affairs with the commonwealth. A similar program initiated during the last budget crisis in 1990 brought in $32 million.

Tax amnesty is expected to cost $7 million to implement and promote perhaps with one of those snappy Lady Luck commercials.

We’re certainly not questioning the wisdom of Parrish or Johnson in proposing this legislation. They realize that this is a proven source of revenue. The shame, however, is the fact that the commonwealth has to resort to playing the role of public library in convincing people to pay their back taxes by offering leniency.

If such a program will earn the state more than $44 million, then there are people and businesses out their who have willingly withheld their tax payments and are waiting for such an occasion to come forward with no repercussions. What does this say to honest Virginians who keep up to date with their taxes regardless of whether they can afford it?

People who get caught or innocently foul up their state taxes and come forward after the fact are often steam rolled with penalties and interest. Tax amnesty, while bringing in needed revenue, is rewarding those who are indifferent toward the law.

If the state government is positive that such a plan will reap financial rewards for the commonwealth, then they must be certain that there are people and businesses intentionally withholding their tax payments.

So after the tax amnesty becomes law, perhaps the legislature can get to work on true reform on the tax code along with a better process of tax enforcement.

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