The top 1 percent are evading $163 billion a year in taxes, the Treasury finds.

[Nevilledog]

Link to tweet

https://www.nytimes.com/2021/09/08/business/irs-tax-avoidance.html

WASHINGTON — The wealthiest 1 percent of Americans are the nation’s most egregious tax evaders, failing to pay as much as $163 billion in owed taxes per year, according to a new Treasury Department report released on Wednesday.

The analysis comes as the Biden administration is pushing lawmakers to embrace its ambitious proposal to invest in beefing up the Internal Revenue Service to narrow the “tax gap,” which it estimates amounts to $7 trillion in unpaid taxes over a decade. The White House has proposed investing $80 billion in the tax collection agency over the next 10 years to hire more enforcement staff, overhaul its technology and usher in new information-reporting requirements that would give the government greater insight into tax evasion schemes.

The proposals have been met with deep skepticism from Republicans and business lobbyists who argue that the I.R.S. cannot be trusted with more power and that the proposals are an invasion of privacy. Democrats are counting on raising money by collecting more unpaid taxes to help pay for the $3.5 trillion spending package they are in the process of drafting. The Treasury Department estimates that its tax gap proposals could raise $700 billion over a decade.

The Treasury Department report, which was written by Natasha Sarin, deputy assistant secretary for microeconomics, makes the case that narrowing the tax gap is part of the Biden administration’s ambition to create a more equitable economy, as audits and enforcement actions will be aimed at the rich.

*snip*

[brush]

1. That 163B seems low to me. What about the corporations that pay little to no taxes?

They're people too, remember. Getting these slackers to pay their fair share is part of how the Biden admin plans to pay for the "For the People" reconciliation infrastructure act.

If we can ever get the two attention-seeking and recalcitrant Dems to come around and help their party to deliver on promises for jobs and people infrastructure...with an eye on how it will help us maintain our majorities in Congress in the mid-terms.

I swear, sometimes those two, and the names need not be mentioned, act just like republicans.

[madville]

9. Many businesses purposely structure, disperse and reinvest

So they make zero profit. If a business or corporation is showing a profit and paying taxes they need a new accountant or CFO.

[brush]

10. You mean they pay no taxes, right? Are you advocating that...

by saying they need a new CFO?

[madville]

13. How do you make a business pay taxes if there aren't any profits

Why would a business purposely show a profit on paper and pay taxes on it? They could use that excess cash and buy new equipment, pay out bonuses or dividends, build a new building, etc. Those can cancel out the profit and eliminate the potential tax liability. What business anywhere would purposely pay taxes to the government when they have multiple ways to write off that profit?

[brush]

19. Are you an accountant? Are you saying corporations...

shouldn't pay their fair share of maintenance of the roads their trucks use, their share of maintaining sewers, the power grid, etc?

Or are you saying the tax code as written should be adjusted so obviously profitable businesses contribute to the common good?

What's your agenda?

[madville]

21. It wouldn't change the corporate structure or issues

Taxing corporations and businesses “their fair share” is a myth. The end consumer would simply pay any potential new tax that is levied, regardless of what it is.

Say a corporation sells a widget for $100 and breaks even on paper, not having to pay any tax on a profit. The government levies a 5% gross revenue tax to combat that. The entity simply raises their price to $105.25 for the same widget and maintains their normal operations just as before, end result is the consumer paying the new tax and the corporation is just the conduit that the government collects it through.

As far as corporations paying for roads and utility infrastructure, they pay the same fuel and utility taxes as everyone else, either at the pump or through their utility bills.

[brush]

22. I need your solution not examples of how tax avoidance/evasion works.

You seem to be okay with corps paying no taxes. Why should the burden be totally on individual citizens?

[madville]

23. The burden is always on individual citizens

No matter how you package it, it all filters down to the consumer because they are the ones ultimately funding the corporation.

It’s a fairy tale to think that corporations are going to absorb a new tax without ultimately passing it along to their customer to balance the ledger.

My solution would be increase personal income tax rates on the top 10% and create luxury sales taxes and annual personal property taxes on high dollar items (cars, yachts, planes, jewelry, art, etc) and expensive real estate. Basically hit the rich directly and individually.

Many of the rich are executives and stock holders of these corporations and that’s where the excess money flows.

[brush]

24. Finally. Now you're talking.

[MichMan]

12. So what difference does it make to raise the rate if none of them are paying anything ?

[madville]

16. The end consumer pays for that business to operate regardless

Say you add a 5% tax on all gross revenue for that business, the business simply increases prices to the consumer 5% and continues to operate the same. That’s why a national sales tax on all transactions would be a more simple approach and cut the business out entirely besides just collecting it and passing it along, but it’s not politically palatable.

Any way you package it, increased taxes on business and corporations are passed to the end consumer.

[Zeitghost]

18. You are talking about tax avoidance

The article is about tax evasion. The former is a good business practice, the latter is criminal.

[KPN]

2. That doesn't even include all the gravy loop holes these people

can and do take advantage of. The federal tax system is heavily in their favor, not the average person’s. The current tax system has taken literally thousands of dollars away from 99 percent of families every year and funneled those dollars into the 1-percents’ pockets for decades now. It’s an unsustainable system as we are already seeing in a vast myriad of ways.

[mucifer]

3. well I guess at least they are STARTING to pay attention

[KS Toronado]

6. I want to see the 1% start paying up.

[Klaralven]

4. Federal revenue for FY 2021 is estimated to be $3863 billion

https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762

So they are missing 4.2%.

[Goodheart]

7. So, I catch hell here for advocating for a national sales tax, which some DEFINE as "regressive"

But what's more regressive than a complex income tax system structured for the very purpose of allowing the very rich to avoid taxes altogether?

I'll repeat it to my dying day: a national sales tax would be easier to administer, much easier to monitor, much easier to institute progressive taxation and fairness, and the elimination of all the business costs associated with complying with a complex income tax system would be a boon to the middle class, the poor, and to small businesses who are now disproportiately punished by the consequences of an income tax system.

[JT45242]

8. let's not forget all the social security taxes they don't pay b/c they bought off politicians

Just imagine how solvent social security would be if these top1% had to pay social security on ALL their income not just the first $140K or so.

That's just the tip of the iceberg. They are cheating hundreds of billions out of the very low percentage that they need to pay because they have bought enough politicians over the years to give them all the tax breaks. Apparently 2 trillion in tax breaks wasn't enough so they are taking another trillion every five years by cheating.

[MichMan]

11. If they already know what taxes are evaded, why can't they go after them?

[Zeitghost]

20. They do not know exactly how much or from who

These are estimates based on research, studies and models. They are not a calculation based on adding up who's been caught cooking the books and filing doctored returns. Most would never be uncovered without criminal investigations and you can't just start those on everyone.

[Baked Potato]

14. T***p said the "rich" hated his tax plans. They lied, gosh darn it ! nt

[2naSalit]

15. Imagine that!

[Champp]

17. "Ha ha to you taxpaying suckers." - Republicans

[Blue Owl]

25. The REAL defunders of the police