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WASHINGTON — The richest 1 percent of Americans are the nation’s most dreaded tax evaders and can’t afford to pay $163 billion a year, according to a study. Treasury Department report It was published on Wednesday.
The analysis comes as the Biden administration forces it to adopt its ambitious proposal to strengthen the Internal Revenue Service to narrow the “tax gap” it estimated at $7 trillion in unpaid taxes over a decade. The White House has proposed investing $80 billion in the agency over the next 10 years to recruit more executive staff, overhaul its technology, and initiate new information reporting requirements that will give the government more information about tax evasion plans.
The proposals were met with deep skepticism by Republicans and business lobbyists, who argued that the IRS could not be trusted with more power and that the proposals were a breach of privacy.
Democrats rely on raising money by collecting more unpaid taxes. $3.5 trillion spending package They are drafting. On Thursday, the House Roads and Vehicles Committee will officially begin preparing the voluminous piece of climate change and the 10-year measure to tackle climate change. rebuild the country’s social safety net, with paid family and medical leave, expanded public education, new Medicare benefits, and more.
The Treasury Department estimates that the tax gap proposals could raise $700 billion in ten years.
The report prepared by the department, Natasha Sarin, assistant secretary for microeconomicsreveals that narrowing the tax gap is part of the Biden administration’s desire to create a fairer economy because its enforcement and enforcement actions target the wealthy.
“For the IRS to properly enforce its tax laws against high-income and large corporations, it needs funding to recruit and train revenue agents who can decipher thousands of pages of complex tax returns,” said Ms. Sarin. “It also needs access to information about opaque income streams, such as property and partnership incomes that disproportionately accrue to higher earners.”
The report combines academic research with 2019 tax data on how the tax gap has historically been distributed across the income scale.
Tax compliance rates are high for low- and middle-income workers whose taxes are automatically deducted from their wages. But the wealthy can use accounting loopholes to protect their tax liabilities.
The Biden administration has promised that people with “real income” of less than $400,000 a year will not see audit rates increase.
Last week, a Congressional Budget Office report said that expanding the IRS’s enforcement capacity not collecting that much money Like Treasury Department projects. The analysis, which did not include the information reporting portion of the tax gap plan, estimated that additional enforcement funds would increase by $200 billion over ten years, while the Treasury Department estimated it would increase by approximately $320 billion over that time.
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