The IRS is boosting enforcement of syndicated conservation easements. The Wall Street Journal (paywall) reports that the agency is pursuing criminal investigations against landowners and investors who abuse the tax benefit for limiting property development. Landowners agree to permanent restrictions on future use of their property in return for the ability to claim a charitable deduction for the value of the easement. The Journal reports that some inflate the value of the land: “High-income people can invest $1 and claim $4 or more in deductions within months, enough to turn a quick profit on the tax break.”
In Florida, 99 percent of corporations pay no state income tax. The Orlando Sentinel reports on its investigation of tax avoidance strategies employed by large businesses in the state. Florida has one of the most porous corporate income taxes in the country, and it’s not an accident. “The state of Florida has made a choice,” said David Brunori, a senior director at accounting firm RSM. “They make it very easy—or they don’t make it very hard—to minimize their corporate income tax.” That leaves the state more dependent on other revenue sources, like its sales tax or federal aid. Florida has no individual income tax.
Tacoma, Washington, approves a tax on guns and ammunition. Starting in July 2020, the city will add $25 to each gun sold, plus an additional 2 to 5 cents for each bullet. Revenues will fund gun violence prevention programs. The city council approved the new tax after a heated debate and promises to spend the next several months meeting with community groups to hear views on how to spend the revenue or whether to revise the measure.
Connecticut consumers are bringing their own bags, and ripping a hole in plastic bag tax revenues. The state budget office projects a 10 cent fee for disposable bags will generate only $7 million in the current fiscal year, only one-quarter of the $27.7 million the state projected. Consumer spending is up, along with sales tax revenues, so it seems that residents are environmentally woke. Good for the rivers and the Atlantic ocean. Not so good for the fisc.
Comparing tax incentives for charitable contributions. TPC’s new chart book describes current law tax incentives for charitable donations as well as several alternative deductions that could be made available to more donors.
Want to hear more about taxing the rich? On Friday morning at 9:00, TPC will host an event about ways to tax capital income. Rep. Jan Schakowsky will deliver the keynote, followed by panels discussing legal and economic issues of mark-to-market taxation and other models. Register here. If you can’t wait, the Penn Wharton Budget Model hosts a panel discussion on the economics of wealth taxes at 4:30 today. You can watch the event here.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at firstname.lastname@example.org.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
- © Urban Institute, Brookings Institution, and individual authors, 2016.