An about-face from the Internal Revenue Service brought kudos this week from Joseph Henchman of the Tax Foundation.
Over at interactive.taxfoundation.org, you can plug in a state and a start year and see how many tax filers have moved into and out of that state over time, and how much income they took with them. The underlying data comes from the Internal Revenue Service (IRS); although tax policy is just one of many factors driving interstate migration, the data is vital to seeing trends and using economic tools to measure what might have caused them. (States like California, Illinois, and Maryland have also found the data embarassing, as it shows negative net migration year after year.)
Hence the outrage when the IRS announced that they were canceling the program. An IRS economist, informed of the decision by higher-ups, told the Daily Caller: “We were just told this morning that the program is indeed going to be discontinued. It is not our decision at all and we are very disappointed.” Jim Pettit, of the activist group Change Maryland, penned a National Review piece noting that the decision came soon after the data put Maryland Governor Martin O’Malley on the defensive (O’Malley has routinely asserted that Maryland has a great tax system and business climate, despite strong evidence to the contrary), and the Washington Examiner followed up with an editorial saying that the data is vital for ascertaining which “model” of states (high-tax, high-service vs. low-tax, low-service) Americans were preferring. Members of Congress also started calling, demanding an explanation.
The IRS [Monday] issued its first statement on the matter, in which it appears to reverse course on the cancellation. …
… The IRS has confirmed that it will be the same program without a radical change, although they will not give a target date for the 2011 data release. The IRS should be applauded for continuing to provide this data. However, I’m immensely curious as to who ordered them to cancel it in the first place, and why.
