A Treasury Department official claimed that the richest 1% of earners avoid paying the $ 163 billion in taxes they owe each year, while the bottom half of earners pay less than $ 36 billion.
According to Treasury estimates, the richest 1 percent of earners, or those with annual incomes over $ 758,000, account for 28 percent of all income taxes owed but not collected.
Natasha Sarin, Assistant Under Secretary to the Treasury for Economic Policy, made the statement Tuesday in a blog post, arguing for President Joe Biden’s proposals to expand the IRS’s budget and enforcement powers.
Sarin wrote that the IRS is unable to collect 15% of the taxes owed and advocated for additional $ 80 billion in funding from the IRS over a decade, as well as powers for new “tax initiatives.” compliance”.
A Treasury Department official said the richest 1% of earners avoid paying $ 163 billion in taxes. Billionaire Jeff Bezos is seen above
Natasha Sarin (above), Assistant Under Secretary to the Treasury for Economic Policy, made the statement in a blog post on Tuesday, arguing for President Joe Biden’s proposals to expand the budget and executive powers from the IRS.
A table shows the estimated amount of income tax due but not paid per income percentile
Administration economist Biden claimed the changes would generate $ 780 billion in additional tax revenue that would otherwise not have been collected over the next decade.
“These revenues will be collected in a very gradual manner, as the tax gap is more concentrated towards the top of the income distribution,” she wrote.
Citing academic estimates of unpaid taxes, Sarin said the difference between taxes owed and collected totals about $ 600 billion per year, which means about $ 7 trillion in lost tax revenue over the next decade.
It comes as Democrats debate hotly whether and how to target wealthier Americans for higher taxes.
A ProPublica report in June, relying on tax returns provided by an anonymous revealer unknown to the outlet, pushed the argument for a “wealth tax” advocated by some Democrats like Senator Elizabeth Warren.
The report purported to show how some of the richest Americans, including Jeff Bezos, Elon Musk and Warren Buffet, pay income taxes only on their cash income, arguing that there should be a way to tax the rising value. shares before they are sold. .
The report does not allege any wrongdoing on the part of billionaires, but rather laments that their net worth is not taxed on top of their income.
Elon Musk is seen above. Some Democrats like Senator Elizabeth Warren are pushing for a “wealth tax”
For his part, Sarin publicly opposed a wealth tax, saying it would be too Byzantine to assess and administer, and that it would likely not generate the tax revenues claimed by his supporters.
Instead, Sarin and IRS Commissioner Charles Rettig both advocated cracking down on “tax cheaters” as a way to increase fundraising from wealthier Americans.
Rettig told Congress in June the agency was “overwhelmed” by increasingly sophisticated tax evasion programs, while years of budget cuts have left it around 17,000 fewer agents than ten years ago. years.
New sources of wealth, such as cryptocurrency trading, escape tax, he said, as do increased foreign source income and abuse of business income passed on as personal income. .
He called on Congress to provide “consistent, timely, adequate and multi-year funding”.
President Joe Biden’s FY2022 budget request would increase the IRS budget by about $ 1.3 billion, or 10.4 percent from current levels.
The IRS’s proposed $ 13.2 billion budget would include an additional $ 900 million for tax enforcement in fiscal 2022, which begins October 1.