1/ Yesterday I testified before @WaysMeansCmte on the deep damage to IRS enforcement over the last decade, & how it can be reversed: waysandmeans.house.gov/sites/democrat…
Here's the damage in a chart:
Here's the damage in a chart:
@WaysMeansCmte Whose audit rates fell most? Corporate giants & wealthy filers who overwhelmingly own businesses.
They've got the most complex finances (often set up that way to avoid tax in the first place!) so require experienced IRS staff for audits.
But IRS has hemorrhaged those staff.
They've got the most complex finances (often set up that way to avoid tax in the first place!) so require experienced IRS staff for audits.
But IRS has hemorrhaged those staff.
@WaysMeansCmte Audit rates on working families who claim the Earned Income Tax Credit for working families are down too -- but only a little. Those audits are easier and cheaper for the IRS, so are hurt less by the loss of expert IRS staff.
So now, what we have is this:
So now, what we have is this:
@WaysMeansCmte This means:
The top 1% of filers are responsible for ~30% (& @NatashaRSarin et al has a more recent estimate of ~70%) of the tax gap.
But they're & now audited at roughly the same rate as EITC filers who are responsible for a fraction of that.
The top 1% of filers are responsible for ~30% (& @NatashaRSarin et al has a more recent estimate of ~70%) of the tax gap.
But they're & now audited at roughly the same rate as EITC filers who are responsible for a fraction of that.
@WaysMeansCmte @NatashaRSarin And "pass-through" businesses (whose income is supposed to show up on individual returns) are now audited at much *lower* rates than EITC filers -- but they're responsible for a huge chunk of the under reporting tax gap.
@WaysMeansCmte @NatashaRSarin The 2017 tax law added insult to injury. It's tax cuts also are designed in a way that invites tax gaming to push the boundary between avoidance & evasion in the face of a IRS that has not enough resource to audit enough, or follow through fully on what it finds in audit.
@WaysMeansCmte @NatashaRSarin Last year's budget deal stopped the drain. Now, time to restore IRS enforcement:
1. *at least* to 2010 real levels initially
2. over several years, so the IRS can plan to hire, train staff
3. w/ a special budget mechanism to recognize these funds generate *savings*.
1. *at least* to 2010 real levels initially
2. over several years, so the IRS can plan to hire, train staff
3. w/ a special budget mechanism to recognize these funds generate *savings*.
@WaysMeansCmte @NatashaRSarin There is actually a bipartisan recognition IRS enforcement funding should be restored.
Not only the House, but the President's budget yesterday, while terrible overall, included a proposal with the core of these key elements.
More here: cbpp.org/federal-tax/de…
Not only the House, but the President's budget yesterday, while terrible overall, included a proposal with the core of these key elements.
More here: cbpp.org/federal-tax/de…
@WaysMeansCmte @NatashaRSarin My testimony followed @jasonfurman @rebeccakysar's.
I think they showed vividly that the 2017 tax law's corporate tax cuts & many of its implementing regulations are also a pretty bad deal for most Americans.
Check out their threads of their testimony:
I think they showed vividly that the 2017 tax law's corporate tax cuts & many of its implementing regulations are also a pretty bad deal for most Americans.
Check out their threads of their testimony:
@WaysMeansCmte @NatashaRSarin @jasonfurman @rebeccakysar Also, @SethHanlon live tweeted a ton of the hearing -- even though school nurse calls! -- & you should check out his must-follow feed for more on the budget hearings today, as well as all the tax topics covered at the hearing.
