uncle sam is calling
A Treasury Department report released Wednesday revealed the wealthiest one percent of Americans to be "the nation's most egregious tax evaders," failing to pay "as much as $163 billion in owed taxes per year," The New York Times writes.
Tax compliance rates are typically high for low- and middle-income workers, considering their taxes are automatically deducted from their paychecks. But the wealthiest Americans "are able to use accounting loopholes to shield their tax liabilities."
To narrow the so-called "tax gap," the Biden administration has been lobbying lawmakers to beef up IRS enforcement staff, technology, and information-reporting requirements, per the Times. A White House estimate purports the amount of unpaid taxes to be $7 trillion over a decade.
Republicans are skeptical of awarding the IRS more power, but Democrats are counting on money raised from collecting unpaid taxes to help pay for their $3.5 trillion spending package, the Times writes. The Treasury Department estimates "its tax gap proposals could raise $700 billion over a decade" — although a report from the Congressional Budget Office found an IRS revamp would "not raise as much money as the Treasury Department projects," per the Times.
Still, the department's Wednesday report suggests the narrowing of the tax gap to be aligned with President Biden's desire to create a more equitable economy, considering "audits and enforcement actions will be aimed at the rich," writes the Times. Read more at The New York Times.
Editor's note: This story has been updated to correct the White House's unpaid tax estimate from $7 billion to $7 trillion.