In Big Government We Trust
50,000 inmates claim tax refunds, report no wages(AP)
WASHINGTON (AP) — Nearly 50,000 prison inmates claimed more than $130 million in tax refunds this year without providing any wage information to the IRS, a government investigator says in a report to be released Thursday.
The Treasury inspector general for tax administration stops short of saying the refunds were fraudulently claimed. It does, however, say the Internal Revenue Service should investigate further.
The report is the latest in a series of audits looking at prison inmates claiming tax credits and other government payments. It notes that the IRS identified nearly 250,000 fraudulent tax returns during the 2010 filing season — a 50 percent increase over 2009 — preventing $1.48 billion in fraudulent refunds.
"While the IRS is identifying larger numbers of fraudulent returns, improvements must be made to its screening processes to ensure that returns filed by prisoners get adequate scrutiny," said J. Russell George, the Treasury inspector general for tax administration. "Expanded and expedited access to wage and withholding information would significantly increase the IRS's ability to verify information reported on a tax return when processed, and prevent fraud."
The IRS issued a statement saying the agency takes refund fraud seriously and aggressively fights it.
"The IRS is very successful at detecting and stopping incorrect refunds, including criminal refund fraud, and overall prevents 98 percent of questionable claims from being issued," the statement said.
"The situation involving prisoners is not a simple process, particularly considering the fact that some inmates and their families are legally entitled to tax refunds and that the prisoner population is constantly changing."
The IRS said it works with state and federal prisons to get information about inmates on a voluntary basis.
"However, without congressional action to require state and federal prisons to report the status of inmates to the IRS, there will be gaps in the prison data and compliance problems will persist," the IRS said in its statement.
Copyright © 2010 The Associated Press. All rights reserved.
This Is The "Tax Foundation"
November 29, 2010
Obama Should Cut the Corporate Tax Rate
If Obama and his advisors are looking for a Clintonesque opportunity to move back to the center in a way that would make a real difference to the economy, he should partner with Republicans to cut the corporate tax rate and reform how we tax the foreign profits of U.S. companies. The evidence suggests that such reforms would not only be good for the long-term growth of the economy, but would improve workers' wages and living standards over time, says Scott A. Hodge of Forbes magazine.
A dramatic cut in the corporate tax rate could be the best tonic for the ailing economy.
Next to Japan, the United States imposes the highest corporate tax rate of any industrialized country at nearly 40 percent (combining the federal and state rates).
A 2008 report by economists at the Organization for Economic Cooperation and Development (OECD) determined that the corporate income tax is the most harmful tax for long-term economic growth.
High personal income taxes were found to be the second-most harmful tax for long-term growth, which would argue for not allowing the Bush cuts to expire on the "rich" as President Obama proposes.
The least harmful taxes for growth, according to OECD economists, are consumption taxes and property taxes.
Economic research also finds that because capital is mobile but workers are not, labor bears a disproportionate share of the economic burden of corporate taxes -- as much as 70 percent by some estimates. Economists such as Kevin Hassett at the American Enterprise Institute have found that workers in countries that have cut their corporate rates have seen faster growth in wages than workers in countries that have not cut their corporate taxes. (A recent Tax Foundation study found a similar relationship in our 50 states).
Thus, Obama can legitimately sell a deep corporate rate cut as being prolabor because not only will it lead to an increase in wages and living standards, it will most likely lead to an increase in jobs because America will be a more attractive place for inbound investment, says Hodge.
Source: Scott A. Hodge, "Obama Should Cut the Corporate Tax Rate," Forbes, November 22, 2010.
From the Tax Foundation Site - Testimonials
Facts and Figures on Government Finance is the most detailed and useful statistical portrait of where the spending goes and how it is financed." —Milton Friedman, Nobel Laureate in Economics
"[The Tax Foundation's] tireless efforts to educate the public about America's tax burden have made a big difference here in Washington, and throughout the fifty states. Our tax policies are better for it, and our economy is stronger." —U.S. Treasury Secretary John W. Snow
"Through its outreach efforts and programs such as Tax Freedom Day, the Tax Foundation strives to promote tax reform designed to lessen the tax burden that Americans face today.... And I am grateful for the vast assistance and support that the Tax Foundation provided over the years in the battle for reform." —Dick Armey, Former Majority Leader, U.S. House of Representatives
The "testimonials" by these three conservative apologists above are to be expected. They are in favor of no one paying taxes - except those earning very little. It's what's right according to conservative principles. Beware!
For those that care anything about fairness there are many posts by me and Havakasha re taxes, wealth inequality and its ramifications, corporate malfeasance and conservative/libertarian lies. As I have said many, many times, dems do not have all the answers by far but cons currently have none.