Carter Starts to Flesh Out Education Policy–But There’s a Slight Problem

August 28, 2014 15:30 pm

by Ed · 23 comments

We’re starting to get a sense of how Jason Carter might fund his education program.

He wants to go after tax cheats.

“There’s $2.5 billion that is uncollected out there from people who are cheating on their taxes, and against whom we aren’t enforcing the law. That’s $2.5 billion dollars of money that’s gone uncollected by our state government for years now.”

That’s all well and good but it might not be enough.

People familiar with the state budgeting process tell me that that $2.5 billion figure is very ambitious and it will be very difficult to collect that much. In addition to the  problems the AJC lists, it is unclear how much of that theoretically-collectible amount of money is fees and interest. Any of the old taxes that were caught up in bankruptcy are absolutely not collectible and could violate federal law if pursued. Some of the tax is just too old to collect, too.

So it’s a good first start, but he’s still probably nine figures away from fully funding his initiatives.

{ 23 comments… read them below or add one }

jecarter4 August 28, 2014 at 3:37 pm

The $2.5 billion is just the collectible taxes. It’s $4.4 billion if you want to include the bankruptcies and inactive/closed accounts.

Michael Silver August 29, 2014 at 7:03 am

According to the article, Gov. Deal tried to collect the money but the return wasn’t as big as projected, much like the super-speeder tax. What would be different?

If he’s serious about education, then he should focus his efforts on the Immigration Cheats. Immigration Cheats cost the state billions every year and their presence in our schools mean that resources intended for our children are stolen and given to the cheats, who have significant education needs.

If the Immigration Cheats weren’t present in our state, we’d have enough money to do the education reforms desired by Senator Carter. Senator Carter should step up and demand President Obama vigorously enforce our nations immigration laws, truly secure the borders, and seek out and deport the Illegals. Senator Carter should also demand that the Board of Regents stop enrolling Illegals and shut down a club that advocates for the violation of our laws (UGA Undocumented Student Alliance)

John Konop August 28, 2014 at 3:50 pm

Being in the finance business this is not so simple…..You have many businesses and people on tax payment plans…..If you push to hard you can BK the person and or business…..that may even put more people out of jobs ie business closing….calling people falling behind cheats is not right….I am not saying that some people are not cheating…..but I would guess most are just trying to make ends meet….

Dave Bearse August 30, 2014 at 12:30 pm

“calling people falling behind cheats is not right”

Good point.

Ralph August 28, 2014 at 4:15 pm

This data was from an audit last January. From the AJC:
“Revenue officials estimate that about $800 million of that $2.5 billion sum is from accounts that are at least 15 years old – and thus much harder to collect.” [probably impossible]

“Carter’s idea isn’t novel. The audit noted that a $27 million expansion of the tax compliance division partly under Deal’s watch (in fiscal years 2011 and 2012) helped hire an additional 150 employees. In all, it said, a $67 million investment on tax compliance activities in 2013 yielded more than $450 million in financial benefits to the state.”

It sounds like most of the low hanging fruit has already been reaped, and Carter is just jumping on the same wagon pretending the rest will be just as easy to get. Just like the federal government that can’t get a lot of the taxes they think are owed, the myriad of complications from tax law to legal expenses to find scofflaws, estates of the dead, and trying to get blood from a stone has quickly diminishing returns.

This is just an example of how our tax laws and compliance are not working well, and moving to a consumption tax would correct a lot of this illegal avoidance and untaxed underground economy.

John Konop August 28, 2014 at 4:25 pm

…..consumption tax would correct a lot of this illegal avoidance……

You obviously do not understand the tax lien issues on sales tax now…..If you increase it more you are just shifting the problem….

Ralph August 28, 2014 at 4:28 pm

Liens against companies that don’t pay the sales tax they collect? Hardly the same level, and there are easier criminal charges applied as a deterrent.

John Konop August 28, 2014 at 4:30 pm

It will when you shift it to a higher amount…..

Ralph August 28, 2014 at 4:41 pm

The liens are backed up by sale-able assets. Bankruptcy does not work for discharging owed sales taxes. The bureaucracy trying to run down millions of taxpayers in default can be much more efficiently turned toward remitting sales tax compliance. I suspect you are using straw dog arguments because you simply object to a consumption tax on the false “regressive” tax argument assuming basic essential spending would be exempt.

John Konop August 28, 2014 at 4:45 pm

Ralph,

HUH? If a business does not send in sales tax behind they are behind help me understand the asset?

Ralph August 28, 2014 at 4:50 pm

You were the one who mentioned liens. Liens are applied to assets. Most businesses have assets, and why liens are applied.

You ignored the rest of my points.

John Konop August 28, 2014 at 4:54 pm

The banks who had liens on upside down houses before the last melt down sound like you….Trust me you are missing a lot of moving parts….

Ralph August 28, 2014 at 5:05 pm

John Konop – Liens are made against both individuals owing back taxes as well as businesses that collected sales tax and did not turn it over to the state (which is criminal and not dischargeable in bankruptcy). Other legal avenues are pursued in such collection besides liens.

I responded to the article just like you, but for some reason you are refuting my minor point about consumption taxes being easier to collect than income taxes. This back and forth is getting tedious, so you can have both the first and last word – I’m done here for today.

John Konop August 28, 2014 at 8:48 pm

Ralph,

HUH? You think it is criminal to not pay sales taxes? LOL…..the more you post the more you show you have no idea how the real world works…..you like talking points over facts….

Jon Richards August 28, 2014 at 6:42 pm

Let’s imagine that all of the $2.5 billion is collectible, and that Governor Carter starts collecting the proceeds immediately. And let’s imagine that collecting the taxes doesn’t stretch over years and years.
He collects $1 billion in time to add to the education budget for FY 2016, and then another $1 billion for FY 2017, which ends in July, 2017. The last half a billion us used up by December 2017.

As Governor Carter begins to campaign for re-election in 2018 on his awesome funding of education, the spigot runs dry. Now where does he go to find the money to feed his new $1 billion a year education spending habit?

saltycracker August 28, 2014 at 7:29 pm

Carter’s credibility just went down 10 points and every tax attorney salivated all over his billing invoices. The tax code is written to be complex, confusing, subject to interpretations with complicated expensive enforcement while collections years later are very difficult. Neither party favors a total overhaul of the code, as both sides benefit in different ways.

Harry August 28, 2014 at 10:57 pm

The result, we have the most inequitable and unenforceable tax regime in history. I ask myself how long we can continue like this.

MattMD August 28, 2014 at 11:09 pm

Oh goodie! Is it time for another “FairTax” debate?

I guess those clowns are done licking their wounds.

Harry August 29, 2014 at 12:01 am

What? Fairtax is a diversionary tactic that purports to put forward an easy but unworkable solution. This particular clown has never been a Fairtax supporter.

Jon Lester August 29, 2014 at 6:17 am

You may have noticed that very few “Fair Tax” supporters actually work in retail.

John Konop August 29, 2014 at 6:43 am

Well said Harry…..

saltycracker August 29, 2014 at 6:50 am

Yawn, only the middle people pay “fair taxes” :)

WeymanCWannamakerJr August 30, 2014 at 12:58 pm

This was a toss up to serve with CoPart and their $75 million into the dialogue.