CBS News reported on an analysis by the U.S. Treasury showing that the richest Americans avoid paying $163 billion each year.
The top 1% of Americans are avoiding paying an estimated $163 billion in taxes a year, according to the Treasury Department. In contrast, more than 99% of taxes on regular incomes — paid via a paycheck — get paid.
That discrepancy is pushing the estimated tax gap, the amount of money owed by taxpayers that isn’t collected, to nearly around $600 billion annually, and to approximately $7 trillion in lost revenue over the next decade, the Treasury Department finds.
Tax evasion is concentrated among the wealthy in part because high-income taxpayers are able to employ experts who can better shield them from reporting their true incomes, the Treasury Department argued in a blog post. More complicated incomes such as partnerships and proprietorships – more frequent among high earners — have a far greater noncompliance rate that can hit as high as 55%.
“The tax gap can be a major source of inequity. Today’s tax code contains two sets of rules: one for regular wage and salary workers who report virtually all the income they earn; and another for wealthy taxpayers, who are often able to avoid a large share of the taxes they owe,” wrote Treasury Deputy Assistant Secretary for Economic Policy Natasha Sarin.
Meanwhile our roads, bridges, tunnels, and other vital infrastructure are underfunded. Schools need to invest in physical improvements. Class sizes are too large, especially in urban districts. Teachers are underpaid in comparison to other professionals with the same education credentials.
Taxes are too low on those who can most afford to pay them. Tax avoidance is thriving while our society’s basic needs are not.
It’s past time for nation building at home.
Republican Party=smaller government=major downsizing of the IRS. This was the Ronald Reagan plan all along and it has worked for the 1%. But, people will continually vote GOP for lower taxes….I don’t get it? Dumb down the populace, make them salary slaves for big business and stir up confusion so that the 99% are too busy to see the big picture….. that they are being robbed and deprived of the basic necessities in life.
It’s probably more like ten times that amount. You think that the powers that be at the Treasury department are going to admit just how bad they’ve been in going after the tax scofflaws at the top?
I agree with that assessment. Add to that the actual income that the richest people make that is not even legally taxed.
Bernie Sanders, Anand Giridharadas, David Cay Johnston, Robert Reich, Robert Kuttner, and Dean Baker, etc., having been sounding the alarm about income inequality for a long time. It’s actually quite blatant, overt and in your face inequity; the richey riches are fretting over their next yacht purchase while low wage workers don’t have enough money for health care. It’s amazing that this finding has come from the Treasury Department.
We have one political party dedicated to the myth that lowering taxes on the rich and corporations increases revenue. The GOP claims that lowering taxes stimulates the economy and encourages innovation and entrepreneurship. Total baloney, it never happens. Bush lowered taxes during a time of war; correction, wars.
Corporations that can afford skilled tax accountants are also paying less than they should. Katie Porter has been studying the matter. She said that for every dollar increase in the IRS results in a $6 return. We will need additional revenue streams in order to pay for the reconciliation bill.
Porter writes, “The U.S. loses approximately $1 trillion in unpaid taxes every year because the Internal Revenue Service (IRS) is too underfunded to effectively crack down on corporations cheating our tax laws. Years of budget cuts at the agency have crippled operations and prevented the IRS from properly auditing corporations’ most sophisticated tax evasion strategies. Big corporations and the uber-wealthy should not be allowed to cheat the system while the rest of the country plays by the rules.”https://porter.house.gov/news/documentsingle.aspx?DocumentID=367
But, Simon (constitution) sez…
But, I was taught “democracy” was the lay of the land,
that, equality under the law, was the hallmark of
“democracy”.
If the tax evasion-tax code isn’t financial privilege,
what is?
If this privilege (sanctioned by law) isn’t the
hallmark of aristocracy, what is?
Does the Demos hypothesis fit the data ?
(The tax gap IS a major source of inequity)
Enter the “franchise extension puzzle”.
Why would incumbent autocrats, with a monopoly
on political power, and often on economic
resources, agree to share their power with
broader segments of the population whose
goals they do not share?
Damn those baskets of deplorables, ‘rumpers,
choice schools, edu-deformers, anti-jabbers,
commies, anti-wokers, ad infinitum…
So when it comes to illusions a group holds
dear, we need to ask, who benefits from these
illusions,and who suffers?
The last paragraph is provocative. The sad truth is that so many that vote to keep the elite autocrats in power are those that do not have health care and cannot afford child care. They repeatedly vote against their own self interests, and they fail to understand that their labor is severely undervalued by those they support in elections.
Do you want me to quote LBJ or Dylan . In either case we are approaching 60 years. Should I go back further perhaps Bacon’s Rebellion.
Tough “to be better than them” when them became the President of the United States
This morning on NPR, there was a story about how China is attempting to solve the problem of income inequality in that nation. Seems the “Communists” are not too different from the rest of the world when it comes to the problem of citizens who are feeling that their children might not be able to expect to see better times than they did.
We should worry over this.
The issue that galvanized the North before the American Civil War was the Free Soil movement: Will your children have land to farm if the slave holders can dominate movement into the new territories acquired in the Mexican War?
The issue that galvanized the Germans during the great depression was similar: Hitler told people that their potential to live as they desired was compromised by boundaries. You need lebenstraum (elbow room) he told them.
Today the cost of a place to live and a way to educate your children looms large in the American psyche and seems to be important to those in China too. The autocratic nature of Chinese society and their competition with us makes this doubly problematic.
Can we face income disparity without autocracy? I doubt it. Income inequality will make us all ultimately less free.
But what is the source? Is it greed and an unwillingness to pay the fair share of the burden of having a better society? Is it automation, the outsourcing of work to the machine? Is it the desire for hegemony on a national or international level?
But what is the source?
My WAG: ILLUSIONS that “drill” a hole in the
“soul”. A hole that is never filled with concocted
fillers…Money, notoriety, titles, status…
So when it comes to illusions…
China’s GINI is now slightly higher than is that of the US. Both are WAY higher than Europe.
Extremely autocratic countries are able to sustain this, for a time, but eventually, . . .
The rich in both countries will keep pushing their toy until it breaks.
Love that last sentence. What an image to explain history! I think i will start a new school of history. Man as toy pusher.
Thanks, Roy!
To make a point about the corruption of most of the richest Americans, I want to compare mandatory spending to discretionary spending.
Most if not all mandatory spending programs started out with revenue streams meant to support them.
Discretionary spending seldom if ever had a revenue stream to support those programs.
In 2019, revenues totaled $3,451 trillion and spending was $4,411 trillion
Mandatory spending added up to $3087.7 Trillion
Discretionary spending was $1,323.3 Trillion and half of that went to Defense. (DOD, CIA, et al)
It is apparent to me that the deficit has been funding discretionary spending for decades.
Since most mandatory spending, Social Security, Medicare, Medicaid, CHIP, ACA subsidies, and income security programs is for the working class, who is profiting from discretionary spending?
I think the answer is simple: The wealthiest one percent of Americans and most if not all of them are not paying the taxes they owe. Instead, the rich take, take, and take some more but do all they can not to pay what they owe.
https://budget.house.gov/publications/fact-sheet/frequently-asked-questions-about-federal-budget