It’s too early to tell how Chris Graham will perform as head of Mississippi’s Department of Revenue.
But if he’s like the last two revenue commissioners, he will soon get frustrated with the Legislature’s unwillingness to give the agency the manpower to effectively do its job.
The Department of Revenue, as with the Internal Revenue Service on the national level, pays for itself and a whole lot more.
It could bring even more cash to the state’s perpetually strapped treasury if it had more auditors to hunt down those Mississippi businesses that don’t pay their taxes.
And there are lots of them.
During the summer, one pot of pandemic relief money gave a glimpse of how many. The Legislature set aside $60 million of federal assistance to give $2,000 grants to around 29,000 small businesses. There was just one catch. The businesses had to have filed their state income taxes for the previous two years. Incredibly, about one in four had not and were disqualified.
The ease with which businesses get away with skirting their state taxes led Herb Frierson, a former lawmaker and the revenue commissioner before Graham, to observe, “It makes me wonder why anybody pays at all.”
The Legislature temporarily tried to do something about this eight years ago while Ed Morgan was revenue commissioner. The solution, though, apparently worked too well.
Morgan had convinced lawmakers to give him an extra $3.5 million to hire more auditors to go after the tax cheats. He promised to bring in an extra $10 million if they would.
Morgan grossly underpromised. Collections increased by $81 million.
How did lawmakers respond? They cut Morgan’s budget the next year. Apparently, they decided they’d rather have revenue problems than have their constituents griping about being audited.
It’s absurd, right? But that’s how the government too often operates. It throws money at what doesn’t work and starves what does.