Wednesday, September 30, 2009
Editorial: Tax amnesty offers a rare opportunity
People and businesses owing back taxes can clean their record and help the state.
From the RoundTable blog
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In the coming weeks, Virginia tax cheats have a chance to pay off their debt without penalty. Gov. Tim Kaine this week announced a tax-amnesty program from Oct. 7 to Dec. 5. It is smart policy and a chance for scofflaws to make good.
The General Assembly unanimously approved the tax-amnesty program this year because the commonwealth badly needs the cash. Revenue shortfalls have crippled state services this biennium, and Virginia is on its knees begging people and companies with outstanding tax bills to pay up.
Estimates vary about how much the program will raise, but they seem to have settled around $45 million. That will not close the revenue gap, but every bit helps. Previous tax amnesties in 1990 and 2003 brought in $32 million and $98 million respectively.
Those who come forward would not pay the usual 20 percent penalty and would have half of the interest they owe waived. More important, they would reduce the stress in their lives. They no longer would need to worry that state enforcers will come knocking any day. Tax collectors do not break knees, but they do wield lawyers and can shatter a credit rating.
In other words, it is a sweet deal tax scofflaws should not pass up.
About 550,000 people and businesses have delinquent tax bills averaging $2,315. Each will receive a letter from the state Department of Taxation about the amnesty.
Make no mistake, this amnesty coddles lawbreakers who deserve tougher treatment. Tax cheats commit a terrible crime whose victim is society itself. Refusing to pay what one legally owes is a crime against all of one's fellow citizens who must pay more to offset the lost revenue.
Yet collecting from people who refuse to pay is rarely easy or cheap. Too often, it is more expensive to pursue a case than the outstanding taxes are even worth. An amnesty might let crooks off, but the state might never see the millions otherwise.
