JMI Policy Director Bob Sanchez quoted on tax amnesty in Sunshine State News article “Florida Gives Another Break to Tax Scofflaws” by Ken Ward.Excerpt:
….Beginning Thursday, the state of Florida will waive penalties on back taxes owed by businesses and individuals. During a three-month window closing Sept. 30, all applicable interest fees also will be cut in half.A similar tax-amnesty program recouped $260 million in previously lost revenue in 2003. This year’s version, coming in tighter economic times, is projected to generate up to $100 million.….Bob Sanchez, policy director for the James Madison Institute, a conservative think tank based in Tallahassee, said the need for periodic tax amnesties is partly due to the tax code itself.”Taxpayers’ compliance generally improves when the tax code is kept simple and the rates are kept low. Indeed, the formula of ‘broad base, low rates’ generally results in a net gain of revenue for the government because reporting is simpler, and there is less incentive for tax avoidance.”Unfortunately, the federal and state tax codes are often burdened with scores of politically inspired complications,” he said.Sanchez added, “Occasional tax amnesties are a helpful method of dealing with the underpayment, recouping lost revenue that is rightly owed to the government but has not been collected – either because of deliberate avoidance or mere oversight and confusion.”Yet Sanchez also cautioned: “Such amnesties, with their reductions in penalties and interest charges, have not been shown to provide an incentive for tax avoidance any more than ‘amnesties’ for overdue library books encourage forgetful borrowers to hang on to the latest best-seller.” . . .