{"id":133118,"date":"2021-04-22T22:28:00","date_gmt":"2021-04-22T22:28:00","guid":{"rendered":"https:\/\/dissidentvoice.org\/?p=115751"},"modified":"2021-04-22T22:28:00","modified_gmt":"2021-04-22T22:28:00","slug":"when-the-rich-dont-pay-the-rest-of-us-do","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2021\/04\/22\/when-the-rich-dont-pay-the-rest-of-us-do\/","title":{"rendered":"When the Rich Don\u2019t Pay, the Rest of Us Do"},"content":{"rendered":"

Over 30 years ago, a real estate bigwig in Manhattan (no, not him) was convicted<\/a> of tax evasion. Her name was Leona Helmsley, the famous Queen of Mean. Even more famous, lasting approximately forever, were six words she let slip: \u201cOnly the little people pay taxes.\u201d<\/p>\n

The words are far from true\u2014the big people have always paid the lion\u2019s share<\/a> of taxes\u2014but they point to a truth that\u2019s finally getting the attention it deserves. Here it is, in a different six words:<\/p>\n

The big people hugely evade taxes.<\/p>\n

They consistently and significantly under-report their incomes. According to The Internal Revenue Service, they\u2019re by far the biggest<\/a> contributors to a tax gap approaching $600 billion<\/a> a year. (The gap is the difference between taxes owed and taxes paid, and it\u2019s long been out of control.)<\/p>\n

Even more damning, the latest research<\/a> has turned up a link between incomes and levels of tax evasion: the more money the rich make, the more they cheat.<\/p>\n

Those in the top fifth generally fail to report 10% of their incomes. The unreported percentage climbs with incomes, hitting 20% or more<\/a> for those in the top 5%.<\/p>\n

The biggest thieves of all occupy the top sliver, the top 1%. In general they cheat the Treasury by not reporting between 25 and 30 percent of their real intake. (Sarcastic props to those in the top .01%; they\u2019re so trustworthy, they only under-report by about 15%.)<\/p>\n

Let\u2019s translate those numbers into dollars. America\u2019s richest 1% have an average annual income of about $1.7 million. Not according to their tax returns, though\u2014the incomes they report are short on average by $425,000 to over half a million.<\/p>\n

It\u2019s highway robbery by the rich. As the researchers calculated<\/a>, \u201cFully collecting the unpaid taxes of the top 1% would increase income tax revenue by an amount equivalent to 10.1% of the aggregate amount actually collected. For example, it would have increased tax revenue by $173 billion in 2019\u2026\u201d<\/p>\n

The cheaters cheat because the system inherently encourages them and lets them get away with it. They self-report their incomes; they decide what numbers to enter on their tax returns, and the IRS effectively has to accept them. Audit rates, always low, have been driven even lower by a Republican hatchet job<\/a> on the agency\u2019s budgets. The number of auditors is similar to the totals in the 1950s, \u201cwhen the economy was a seventh of its current size.\u201d<\/p>\n

Self-reporters<\/a> include millions of sole proprietorships, partnerships, limited liability companies and S-corporations. The vast majority of workers\u2014Helmsley\u2019s little people\u2014live in a totally different tax world. Their incomes are automatically reported by the companies they work for. As their W-2s and 1099s warningly remind them, \u201cThis information is being reported to the Internal Revenue Service.\u201d<\/p>\n

At long last\u2014in what would be a major breakthrough\u2014the work income of rich tax cheats could be in for similar treatment. They could get their own 1099s, listing income information supplied by the banks they use. And, yes, the same information would be shared with the IRS. These new and special 1099 forms are a key component of the IRS Enhancement and Tax Gap Reduction Act, reintroduced<\/a> in February by Rep. Peter DeFazio (D-OR)<\/p>\n

The bill adopts the central conclusions of a definitive 2020 analysis<\/a> by former IRS commissioner Charles O. Rossotti. Since most of the tax gap stems \u201cfrom income that\u2019s not reported to the IRS by third parties,\u201d the No. 1 priority is obtaining and verifying those numbers. The bill would also \u201csignificantly increase IRS funding levels over the next decade\u201d to help the agency narrow the gap and better carry out its overall mission.<\/p>\n

The new 1099s would go to upper-tier taxpayers<\/a> with income \u201cfrom low-visibility sources.\u201d In practice this would mean \u201cabout 5% of all individual filers and about 20% of those with sole proprietor incomes.\u201d Self-reporters with modest incomes would not face any additional scrutiny.<\/p>\n

Here\u2019s to a long-overdue income reporting reform. If it passes, if it works, the IRS may finally know as much about the big people as it\u2019s known about the little people for over 75 years<\/a>.<\/p>\n

The rewards would be huge. According to DeFazio, \u201cthe average U.S. household is paying more than $3,000 annually to subsidize taxpayers who aren\u2019t paying all that they owe.\u201d<\/p>\n

\u2022 This article first appeared at www.nydailynews.com<\/em><\/a><\/p>The post When the Rich Don\u2019t Pay, the Rest of Us Do<\/a> first appeared on Dissident Voice<\/a>.\n

This post was originally published on Dissident Voice<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"

Over 30 years ago, a real estate bigwig in Manhattan (no, not him) was convicted of tax evasion. Her name was Leona Helmsley, the famous Queen of Mean. Even more famous, lasting approximately forever, were six words she let slip: \u201cOnly the little people pay taxes.\u201d The words are far from true\u2014the big people have [\u2026]<\/p>\n

The post When the Rich Don\u2019t Pay, the Rest of Us Do<\/a> first appeared on Dissident Voice<\/a>.<\/p>\n","protected":false},"author":407,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20202,5126,20203,20204],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/133118"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/407"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=133118"}],"version-history":[{"count":1,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/133118\/revisions"}],"predecessor-version":[{"id":133119,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/133118\/revisions\/133119"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=133118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=133118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=133118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}