White House officials plan to make a massive increase in enforcement at the Internal Revenue Service a central component of the tax proposal they will unveil this week alongside a $1.8 trillion spending package, according to four people briefed on the matter.
....Probably the single biggest source of new revenue in the plan comes from dramatically expanding the clout of the nation’s tax agency. It seeks to beef up the number of agents and give the IRS new tools and technology to execute collections and crack down on avoidance, the people said. White House officials have eyed raising as much as $700 billion from toughening IRS enforcement and auditing over 10 years, two of the people said, although the precise amount in the plan remained unclear. Enforcement will be focused on the wealthy, the people said.
Here's an updated version of a chart I published a couple of years ago:
As you can see, my trendline turned out to predict the 2018 audit rate perfectly. At the pace we were going, rich people wouldn't have gotten audited at all by 2021.
And make no mistake: this was not just a matter of neglect. It was a very explicit policy of the Republican Party in order to reward their rich donors. President Obama tried to fight back, but he didn't try very hard and congressional Republicans were able to continue gutting the IRS every year. Needless to say, once Trump was in office there was no longer any pushback at all.
A trio of economists estimated last year that an aggressive push to audit the rich more rigorously would raise about $1.4 trillion over ten years. The Biden folks are more cautious, estimating $700 billion. Whatever the number, there's no good excuse for ignoring the massive drop in audits of high-wealth individuals between 2011 and 2018. Good on Biden for recognizing this as not just a way to fund his spending priorities, but a simple matter of justice as well.
Maybe they could combine this with an effort to make it easier for people to file their taxes correctly, as civilized countries do. The current system is run for the benefit of TurboTax and the rest.
I'm looking for a TurboTax replacement that is not browser based. I run a Mac and TurboTax requires an OS upgrade every year and I've gotten pretty tired of that.
If it is not browser based, it will need to be implemented for multiple platforms. That's a bad idea.
I only use Linux on my computers (*), and a government-led "solution" that excludes me is not a solution at all. Right now, I use freefillableforms in my browser, and it's OK (not great, barely above acceptable, but OK)
(*) don't ask about the exception
I use TaxAct, still browser based but doesn’t seem to require updates
But ... but jaaaab creeeaaterrrzzzz! Increasing audit rates will disincentivize capital transmogrification something something inflation something depression something something miiillllyunnnzzz of jobs will be lost!! Aiyeee!!
Also, Biden is a puppet being controlled by witch-doctor Kamala who just wants to take all your money and give it to her BLM antifa friends.
One of the less-appreciated effects of computers spreading everywhere is that it's really easy to tax regular old workers (their earnings are very regular, and reported electronically to the big computers in DC, so in fact it's very easy for the IRS to figure the taxes of regular workers -- who generally have withholding and have paid their taxes anyway) and much harder to tax the rich, who often make income in off-the-books ways or engage in business transactions that it takes a real human accountant/tax expert to inspect and understand. If you only have the funding for computers, and not for expensive human accountants, then the rich get off scot free -- and start doing even more bad tax stuff because they know there's no one watching.
Not to brag but in the late 80s/early 90s I happened to be working for a newspaper and covering the IRS at that time. I wrote about this then (in '91) and the trend has continued.
At the time I was working from a GAO report on this topic, published, I believe, in 1991. I can't find that online at the moment, but here's a similar report about audit rates going down, from 1995.
https://www.gao.gov/assets/ggd-96-91.pdf
This is a perennial of our unfair society over the past 50 years. We let the rich off the hook and give workers a hard time.
Sorry, that GAO report is actually from April 1996, but covers the just-previous years.
I've been making the same point - it's almost impossible for reg'lur folks to hide their income. The IRS gets copies of everybody's W2, 1098, 1099-INT, 1099-DIV, etc and can check the tax filing with software without any effort at all.
Our current tax laws basically leave it up to the very wealthy to declare how much income they have and from what source, since, as you observe, it's hardly ever just wages or salary that gets reported as such. Must be nice.
Will any savvy pundits write columns about how the Democrats are the party of law and order now... or do those words mean something else?
I wouldn't have voted for Biden in any past primary, & only out of refusal to support the crackpot right in the general, but am glad that THIS is the time he made it to the Oval Office. He's not perfect, but most of what he is doing is working out better than expected. Hoping for improvements in Central America & in ability to handle immigration, especially desperate refugees.
Next up: campaign finance reform.
Hope the "Republicans" in name only choke on all of their whining about lack of bipartisanship.
This seems like really good politics. Go Joe!!
Back in the day when Dinos roamed, my late wife worked for the San Jose IRS office on Gish Rd. She said then that the computers used pigeons to carry one bit at a time to and from San Jose to Fresberg (Fresno). She eventually quit when her boss asked her to lie on TV. She took the CPA exam and aced it winning one of the Sells awards. Smart woman.
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I'd also be in favor of having the State and Treasury departments go after those infamous tax haven countries where the global elite stash their ill-gotten gains. I'm sure there are various sanctions and other kinds of pressure that could be brought to bear until they reformed their banking and incorporation laws to our satisfaction.
And they say Trumpers are resentful. What kind of person wants another person to get audited by the IRS?
Oh dear. You don't know what an 'audit' is do you? BTW, that's a 'no' on the fries.
A person who can't cheat on his/her taxes will almost guaranteed resent a person who cheats like crazy. "I pay my taxes and you aren't paying squat" about sums it all up.
... except, there's not much evidence of this in the culture is there. The mood is more "Damn, everybody's doing this, I wish I could join in"
I wonder how many of K. Drum's neighbors in newly blue Orange County pay their 'mow, blow, go' guy in cash? Ditto their cleaning ladies.