At the New York Times, Peter Coy makes a convincing argument that the only way to address the deficit is to raise revenues, or in human terms, raise taxes. Of course, money already spent by the government has to be paid for, eventually, even if it was spent on things we would have preferred it not be spent on. Going forward, it would be nice to think that money will be better, more wisely, more effectively spent, but what are the chances of that happening? And so, future expenditures will have to be paid for as well. By taxes.
You don’t hear this from either Republicans or Democrats because calling for higher taxes is seen in Washington as politically fatal. As I said, it requires imagination. When you step back from the daily tit for tat, it’s hard to imagine any way to fix the nation’s finances in the long term that doesn’t involve more tax revenue. As Sherlock Holmes said, “When you have eliminated all which is impossible, then whatever remains, however improbable, must be the truth.”
And before anybody points fingers, the only person worse than Biden when it comes to growing the national debt is Trump, who knows a lot about debt. But there is, they (the ubiquitous but vague “they”) say, another answer. Collect taxes from the cheats who aren’t paying either at all or at least what they should.
But new data on tax avoidance by the ultrarich badly undermines GOP claims to being an anti-elite, pro-worker party. It shows that if Republicans get their way with regard to the IRS, a nontrivial number of very rich Americans would continue to underpay taxes they owe, effectively making out like bandits — some literally so.
Nearly 1,000 tax filers who earn more than $1 million per year have still not filed federal tax returns for at least one year from 2017 to 2020, according to IRS data provided to Senate Finance Committee Chairman Ron Wyden (D-Ore.).
What’s more, the 2,000 people who represent the highest-income non-filers in one or more of those years owe a total of more than $900 million in federal taxes, the data shows.
The point here is that by funding the IRS to hire an army of tax auditors, they can go after these 3,000 people whom Senator Wyden says are blowing raspberries at the IRS. Are 3,000 ultrarich taxpayers from whose pockets our deficit could be eliminated, or at least reduced, too burdensome for the IRS to address now? Would it really require $80 billion for more revenuers to come up with a jeopardy assessment and snag a big building here and there?
But according to Greg Sergant, it’s paying off.
Unfortunately for Republicans, enforcement funded by that law has paid off — bringing in more than $38 million from 175 rich tax delinquents, the IRS announced in July. And this month, the agency announced plans to use the funding for still more efforts targeting wealthy tax avoiders.
Was the IRS so strapped for cash, so lacking in enforcement agents, that they couldn’t go after 175 tax delinquents without an $80 billion infusion? Perhaps so. Perhaps everybody at the IRS was already too busy making sure all the computers that did the bulk of the auditing work of ordinary folks’ 1040s were plugged into the outlet.
But there’s another concern that arises from this zeal to find new revenues to pay off squandered tax dollars. The easy money comes not from the 175 or the 3,000, but the millions of regular folks who get W-2s and 1099s, so that their financial life is all digitized and a plugged-in computer can spit out any dime they failed to pay. After all, when the new regs require reporting of income of $600 or more, is that because somebody decided that they would snag those damn ultrarich trying to skirt payment on the $600 they made on eBay?
Telling the public that they’re raising taxes is politically fatal. Telling the public that they’re going after ultrarich tax cheats is groovy, even if it’s at $600 a pop. And this way, the government can spend promiscuously on every program to help people that makes your heart break no matter how much or little of the money actually finds its way to the downtrodden. After all, we’re not ultrarich, so it’s not like it’s our money. And screw them, anyway.