Is tax amnesty a practical revenue generator or absolution for scofflaws?
The Missouri House recently approved an amnesty period from Aug. 1 through Oct. 31 when delinquent taxpayers may satisfy their debt to the state without penalty.
Amnesty is not without strings. Participants must comply with state tax laws for eight years or incur renewal of penalties and interest that was waived. They also would be ineligible for future amnesty for the same tax.
Bill sponsor, Rep. Tom Flanigan, R-Carthage, estimates the amnesty period will provide a one-time, $75 million boost to the state’s operating budget. The revenue boost, incidentally, already is anticipated in the budget proposals of the Republican House and Democratic Gov. Jay Nixon.
“If you’re behind the 8-ball, all we’re looking for is payment of the tax,” said Flanigan.
Although the bill passed the House on a 153-1 vote, its prospects are dimmer in the Senate.
The amnesty period has been characterized as the “tax-cheat program” by Senate President Pro Tem Tom Dempsey, R-St. Charles.
“We think they need to pay their taxes on time just like every other taxpayer,” Dempsey said.
Amnesty periods are not without precedent in Missouri. One in the 2002 budget year collected $74 million, followed by another in 2003 that generated $42 million.
Similar programs have been debated by lawmakers, but not approved, in subsequent years.
We see the debate largely as one of practical versus principle.
Although collecting money owed to the state is both tempting and practical, we believe amnesty sends the wrong message. It is an injustice to honest taxpayers, and it not only absolves, but encourages, tax cheats.
Copyright Jefferson City News Tribune. Reprinted with permission.