I am against this bill which proposes the creation of a 'currently not collectible' status for individual income taxes in Virginia. Here's why:
Risk of Abuse: The provision allowing taxpayers to file for this status could be exploited, leading to a situation where individuals might avoid paying taxes by claiming hardship, potentially undermining the tax system's integrity, similar to concerns over program misuse in Bowen v. Roy (1986).
Revenue Impact: This policy could significantly reduce state revenue if many taxpayers qualify for this status, affecting public funding for services, which parallels fiscal responsibility concerns highlighted in City of Richmond v. Virginia (1976).
Administrative Burden: The requirement for annual reapplications and the five-year limit per assessment places an additional administrative load on the Department of Taxation, potentially diverting resources from other critical functions, akin to the administrative efficiency issues in Massachusetts v. EPA (2007).
Inequity in Taxation: By allowing some taxpayers to defer or avoid tax payments, this bill might create an uneven tax burden, where those unable to claim this status bear a disproportionate share of the tax load, reflecting equity concerns similar to those in San Antonio Independent School District v. Rodriguez (1973).
Moral Hazard: There's a risk that this status might encourage taxpayers to manage their finances in a way that qualifies them for hardship status, creating a moral hazard, much like the incentive issues discussed in United States v. Butler (1936) regarding government subsidies.
Lack of Permanent Solution: Offering temporary relief without addressing the underlying financial issues might not provide a long-term solution to taxpayers' financial difficulties, potentially leading to ongoing dependency on government leniency, a critique similar to those in welfare reform discussions post-Goldberg v. Kelly (1970).
Precedent for Other Debts: This could set a precedent for similar relief measures for other types of debts, potentially destabilizing financial systems by normalizing non-payment, echoing concerns about broader economic impacts from Home Building & Loan Association v. Blaisdell (1934).
I oppose this legislation due to the potential for abuse, significant impact on state revenue, increased administrative burden, creation of tax inequity, moral hazard, lack of a permanent solution to financial distress, and the risk of setting a problematic precedent for debt management, advocating instead for more comprehensive financial support systems or targeted tax relief measures.
I am against this bill which proposes the creation of a 'currently not collectible' status for individual income taxes in Virginia. Here's why: Risk of Abuse: The provision allowing taxpayers to file for this status could be exploited, leading to a situation where individuals might avoid paying taxes by claiming hardship, potentially undermining the tax system's integrity, similar to concerns over program misuse in Bowen v. Roy (1986). Revenue Impact: This policy could significantly reduce state revenue if many taxpayers qualify for this status, affecting public funding for services, which parallels fiscal responsibility concerns highlighted in City of Richmond v. Virginia (1976). Administrative Burden: The requirement for annual reapplications and the five-year limit per assessment places an additional administrative load on the Department of Taxation, potentially diverting resources from other critical functions, akin to the administrative efficiency issues in Massachusetts v. EPA (2007). Inequity in Taxation: By allowing some taxpayers to defer or avoid tax payments, this bill might create an uneven tax burden, where those unable to claim this status bear a disproportionate share of the tax load, reflecting equity concerns similar to those in San Antonio Independent School District v. Rodriguez (1973). Moral Hazard: There's a risk that this status might encourage taxpayers to manage their finances in a way that qualifies them for hardship status, creating a moral hazard, much like the incentive issues discussed in United States v. Butler (1936) regarding government subsidies. Lack of Permanent Solution: Offering temporary relief without addressing the underlying financial issues might not provide a long-term solution to taxpayers' financial difficulties, potentially leading to ongoing dependency on government leniency, a critique similar to those in welfare reform discussions post-Goldberg v. Kelly (1970). Precedent for Other Debts: This could set a precedent for similar relief measures for other types of debts, potentially destabilizing financial systems by normalizing non-payment, echoing concerns about broader economic impacts from Home Building & Loan Association v. Blaisdell (1934). I oppose this legislation due to the potential for abuse, significant impact on state revenue, increased administrative burden, creation of tax inequity, moral hazard, lack of a permanent solution to financial distress, and the risk of setting a problematic precedent for debt management, advocating instead for more comprehensive financial support systems or targeted tax relief measures.