Friday, September 24, 2010

Is Idaho tax system playing political favorites?

Nothing rankles taxpayers more than to know government allows its tax system to play political favorites. That dark suspicion now hangs over the Idaho Tax Commission.

If Republicans—the majority guardians of state government—don't want that suspicion to grow into a major political scandal, they'll act quickly on a broad front.

First, Gov. Otter and the Legislature must take seriously charges by current and former Tax Commission employees that the politically appointed commission has handed out indefensible tax settlements to taxpayers with political connections. An investigation should be a first step, conducted by outsiders with no allegiance to any Idaho taxpayers or political party.

Second, Democratic state Rep. Wendy Jaquet's proposed new legislation to replace the existing four-member, politically appointed Tax Commission with a state Tax Department managed by a tax professionals must be given a fair, public hearing by the Republican-controlled Legislature and not treated as a gimmick.

It would be misguided and politically unwise for Republicans to pooh-pooh the sworn allegations of Tax Commission workers that wrongdoing is afoot in the halls of state government and to dismiss Rep. Jaquet's legislation as politics.

Collectively, tax settlements that commission workers claim are wrong amount to $75 million. That may be peanuts to some who are accustomed to dealing in billions of dollars. That misses the point.

The important issue is whether political influence has seeped into the state tax office, providing some taxpayers with sweet settlements. In one case, $700,000 in sales taxes owed by a golf club were forgiven, and in another, a $203,000 tax break for the owner on his $7 million airplane.

Mind you, these claims are from employees and former employees with 20-plus years service to the state, who are tax professionals, not political appointees, and who are sticking their necks out for the public as whistleblowers.

As for Rep. Jaquet's proposal, can anyone seriously argue that a politically appointed Tax Commission is more likely to inspire public confidence than a Tax Department run by a professional with unassailable credentials in the field?

Republican lawmakers who control the budget process are in a state of high anxiety over the likelihood of a $300 million—plus shortfall in tax revenues.

Therefore, this is no time for Gov. Otter and his GOP colleagues to wave off charges of hanky-panky in the state's tax collection system and to ignore legislative reforms that provide more assurance to taxpayers that everyone is being treated fairly and equally.

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