Carter’s Plan to Crack Down on Deadbeat Taxpayers to Fund Education; Will it Work?

| September 3, 2014

Jason-CarterATLANTA — Jason Carter’s campaign for governor rests on his plan to boost spending for public schools without a tax increase, but Gov. Nathan Deal and other experts say it’s not so simple.

Carter, the Democratic challenger and a legislator from Decatur, hasn’t said how much he wants to boost education spending, but his campaign spokesman Bryan Thomas said Tuesday the goal is to close a gap of about $1 billion per year over the last eight years.

Carter says he expects to collect $2.5 billion in delinquent taxes, pointing to a January report by the Department of Audits & Accounts that includes an estimate from the Department of Revenue of $4.4 billion outstanding. Carter figures if he only collects half of what scofflaws owe, it will be a major boost to the $7 billion education budget.

“There’s no dispute there’s a huge amount of money that’s sitting there uncollected,” Thomas said, adding that improved collections is a matter of leadership. “You put the force of the governor’s office behind it.”

Carter’s campaign issued a press release Tuesday attacking Deal for selling his business to one delinquent taxpayer, Copart, a California-based multinational auto auction. The campaign says the company owes the state $74 million in back taxes, a point the company disputes. The release raises questions suggesting Deal gave the company a pass in exchange for a hefty selling price.

“Why don’t know why they haven’t done anything to collect that,” Thomas said.

The governor’s spokesman, Brian Robinson, denies any shenanigans. Deal has asked an administrative law judge to hear Copart’s case and collect what’s due the state, to ensure no political appointee is involved.

“Obviously, many of these tax cases are complex and open to interpretation,” Robinson said. “Gov. Deal believes that having an administrative law judge decide the case would provide a fair hearing for the taxpayer while removing any appearance of conflict of interest.”

Carter’s plan to have deadbeats fund part of his education boost may face problems.

Deal already increased resources for the Revenue Department twice, resulting in 150 more auditors and other employees as well as technical equipment. That succeeded in squeezing the ne’er-do-wells and scared others into ponying up, according to the Department of Audits.

That may snagged the low-hanging fruit that’s easiest to reach while getting the rest of the outstanding taxes will be tougher, the Audits Department wrote.

“However, according to (Department of Revenue), fraud-detection efforts have identified fewer fraudulent returns over time, thereby reducing the amount of quantifiable benefit (denial-of-fraudulent-refund requests) generated by analysts,” they wrote.

Of the uncollected amount, nearly $2 billion is owed by individuals, and 80 percent is older than four years. The older the debt, the more likely the person owing it has moved, died or gone broke. Just $374 million is owed for corporate income taxes, $122 million for sales taxes, and $113 million for employer’s withholding, and most of it is older than four years, too.

Another snag in Carter’s plan is that even if he succeeded in collecting $2.5 billion, it would only pay for a one-year increase in the budget, notes public-finance expert Thomas Lauth, dean and professor emeritus of the School of Public and International Affairs at the University of Georgia.

“Delinquent-tax collection is one-time funding (unless one assumes continuing delinquency), not recurring funding,” he wrote in an email seeking a comment. “The more sensible ways to increase funding for public education are to (1) allocate a substantial portion of revenue growth (new money) to that purpose or (2) designate a tax increase for that purpose.”

He notes that mention of tax increases in a fiscally conservative state like Georgia would likely cost votes.

“The search for alternative funding for education improvement seems to have led to the delinquent-tax collection idea, which seems not a very viable substitute for the amount of new money that might be expected from strong economic growth or a dedicated tax,” he added.

Deal’s Robinson offered a more cynical observation.

“This is a distinct pattern to Carter’s campaign. He promises billions in new spending and ridiculously insists it comes at no cost to taxpayers,” Robinson said.

(Courtesy Walter Jones, Morris News Service)

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1 Comment on "Carter’s Plan to Crack Down on Deadbeat Taxpayers to Fund Education; Will it Work?"

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  1. D. Miballzich says:

    How about you find a way to squeeze some cash out of the illegals? They get the benefits without the investment.