Yes, those GOP tax cuts for the wealthy were bad and continue to shake the U.S. economy, sending the deficit soaring.
But ProPublica, in cooperation with The Atlantic, has exposed another huge gift to the top wealth holders and corporations, the defunding (and defanging) of the Internal Revenue Service.
See:
ProPublica: How the IRS Was Gutted.
Also appearing in the Atlantic.
The Atlantic: The Golden Age of Rich People Not Paying Their Taxes.
The Atlantic calls it “a hundred-billion-dollar heist.” And it does look that way, doesn’t it?
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From the story:
The cuts are depleting the staff members who help ensure that taxpayers pay what they owe. As of last year, the IRS had 9,510 auditors. That’s down a third from 2010. The last time the IRS had fewer than 10,000 revenue agents was 1953, when the economy was a seventh of its current size. And the IRS is still shrinking. Almost a third of its remaining employees will be eligible to retire in the next year, and with morale plummeting, many of them will.
As a result, the amount of unpaid taxes lost each year because the IRS has failed to pursue them within the statutory 10-year period was over $8.3 billion in 2017, 17 times as much as in 2010. The number of audits conducted have dropped dramatically. Perhaps worse, resources have been poured into audits of low income taxpayers claiming the earned income credit.
For the country’s largest corporations, the danger of being hit with a billion-dollar tax bill has greatly diminished. For the rich, who research shows evade taxes the most, the IRS has become less and less of a force to be feared.
The story has been different for poor taxpayers. The IRS oversees one of the government’s largest anti-poverty programs, the earned income tax credit, which provides cash to the working poor. Under continued pressure from Republicans, the IRS has long made a priority of auditing people who receive that money, and as the IRS has shrunk, those audits have consumed even more resources, accounting for 36 percent of audits last year. The credit’s recipients — whose annual income is typically less than $20,000 — are now examined at rates similar to those who make $500,000 to $1 million a year. Only people with incomes above $1 million are examined much more frequently.
I find the whole situation very depressing. But I’m glad ProPublica has brought it to light. That’s why democracy is so dependent on good reporting.
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Roll with the breakdown.
George Carlin, in his brilliant stand-up on Saving The Planet, “….the earth is not going anywhere, WE are!”
And in Hawai`i, I reported to the state Department of Taxation that I witnessed a local business not ringing up every purchase on its cash register. I named the business. But the business continues doing the same thing. I asked a cashier why they did not ring a purchase up. The cashier’s response: Because I don’t want to.
The economy is not tanking due to the tax cuts, it’s expanding at a higher rate. The deficit is increasing because of spending out of control, not tax revenues declining….tax revenues are increasing. Spending increases faster. That’s not a tax cut issue, it’s a spending issue.
As for the IRS cutting the # of auditors – when an agency is manifestly disregarding confidentiality and punishing people for ideological reasons …. Lois Lerner let off scotfree….IRS Commissioner uncharacteristically visiting the White House hundreds of times under last President…IRS revealing taxpayer information to ideologically partisan organizations … maybe it should do a bit of shrinking. And the Earned Income Credit, let’s face it, did, and does, have a large amount of fraud. One address in Georgia receiving 800 refund checks? SocSec #’s, when used fraudulently to file EIC claims …. not being noticed to the victimized taxpayer…
Resentment of the rich ‘not paying their taxes’ may be a common feeling but at the bar of justice all should be treated equally. A small fraud and a big fraud are both…fraud.
Maybe the whole ‘income tax’ idea is not good: it took a constitutional amendment to get it implemented, and allowed prohibition to be implemented (liquor taxes were primary Federal funding source – to stop that meant…where to get money?)….prohibition went away, income taxes weren’t supposed to be more than 1% or so….now we have liquor taxes AND income taxes….
an interesting ‘Reason’ article along the lines of the third comment…
https://reason.com/blog/2018/12/11/should-we-care-if-the-irs-has-been-gutte?fbclid=IwAR3fg6UVQ25LBoDe-Ds0Risx0qVyWWoXj2A-wOkHngfhjlpsBc-pHEmdquQ