 |
|
Cheating on your taxes—if you happen to be filthy rich—has never been easier. Or more lucrative.
So we’re learning from a new surge of scholarship and research from academics, activists, and veteran tax attorneys. Our richest aren’t just paying a smaller share of their income and wealth in taxes than average Americans. Many of our rich, the data show, are barely paying any tax at all.
Our richest aren’t just paying a smaller share of their income and wealth in taxes than average Americans. Many of our rich, the data show, are barely paying any tax at all.
How could this be? The simplest reason: Budget and staffing cuts, report researchers at the Syracuse University TRAC project, have left the IRS “incapable of fairly and effectively auditing” the over 637,000 Americans who last year pocketed incomes over a sweet $1 million.
Since 2010, the number of IRS “revenue agents”—the staff qualified to audit the complex tax returns of America’s rich and the corporations they run—has dropped 43 percent. What has a cutback that steep meant for wealthy tax filers? IRS internal documents show a 72 percent drop in the number of millionaire-income audits over the last eight years—at a time when the nation’s millionaire-income population was nearly doubling.
Last year, overall, only 2 percent of millionaire-income taxpayers faced an audit.
Fewer audits have, in turn, meant fewer finds of shady returns. The 2012 IRS audits unearthed $4.8 billion in unreported taxes, the 2020 audits only $1.2 billion. At the corporate level, the same story. Audits of companies with over $250 million in assets identified $24.4 billion in unreported taxes eight years ago. Last year, these corporate audits uncovered just $5.4 billion.
We also need to remember, the Syracuse researchers point out, that 2012 represented no tax-enforcement golden age. The agency even then was falling short.
|
|
|
|
