What is the appropriate word for the anticipated take from Louisiana’s latest corporate tax amnesty? The money is anticipated. Or hoped for. Or wished for.
What it certainly isn’t is reliable revenue.
And yet if the money does not materialize, if several large companies do not use the discount on tax penalties to settle their debts with the state, the state must cut health care expenditures, sharply.
Slamming the rent money down on the roulette table makes about as much economic sense.
The 2013 Legislature hopes for at least $200 million from the amnesty. We hope and pray that, whatever the unwisdom of putting this money in the operating budget, it is in there now, and thus will be collected.
Technically, according to the Legislative Fiscal Office, some 300,000 taxpayers who owe about $700 million are eligible for the program.
The reality is that much of that is uncollectable or in such small amounts that it’s almost funny money to count it.
Where is the real money?
In preparing this amnesty, legislators and officials in Gov. Bobby Jindal’s administration obviously reached at least something of a nudge-and-a-wink understanding that some big corporate tax settlements are out there in limbo.
By giving the companies the chance to pay up and avoid all or most of the tax penalties, the idea is that somewhat iffy money will be reaped for this fiscal year’s budget.
Will it work? We hope.
Is it good policy? Nope.
Using one-time money of this nature in the operating budget is unwise. And as the economists say, there’s a definite moral hazard, that companies will come to expect amnesties in future.
That is an undefinable but obviously practical incentive to hold out on tax disputes so that the next amnesty will let the taxpayer off the hook.
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