Legislative / Regulatory | Taxation

Taxes: Federal workers owe ’em, Md. biz pays ’em


It's a head-scratching kind of day on the tax front.

Exhibit A is seeping out of Washington, where the IRS and the Justice Department have launched a nationwide crackdown on identity theft and refund fraud. The numbers so far: Sixty-nine indictments and 939 criminal charges against 105 suspects in 23 states, including action in Silver Spring, College Park, D.C., and Wilmington, Del.

That's certainly good news. There's a special level of hell reserved for identity thieves, but since we can't send 'em there ourselves, we can at least take them out of circulation for a while.

At the same time, though, the IRS reveals that nearly 280,000 federal employees -- including 217 Senate employees, 467 House employees and 36 aides to President Obama -- owe about $3.42 billion in unpaid taxes. In other words, federal workers are responsible for almost 1 percent of the entire tax gap.

The IRS might want to launch its next crackdown a bit closer to home. Let's call it "Operation Cough-It-Up."

Exhibit B comes from Maryland, where business groups are blasting a proposal by Gov. Martin O'Malley to raise income taxes on families that earn $100,000 or more annually. "That would significantly impact small business owners, the majority of whom pay their businesses’ taxes on their personal income tax returns, according to (the National Federation of Independent Business)," Scott Dance reports in the Baltimore Business Journal.

Two days after that BBJ report hit the streets, the folks at The Tax Foundation released a report that claims Maryland has the ninth-worst state business tax climate in the nation.

Cause and effect? Hardly. At the very least, though, it's an interesting coincidence.

Clearly, there's a lot that needs fixing -- and a lot of obstacles standing in the way. What's your answer?


Bill Sheridan