SEVEN TRILLION IN UNCOLLECTED TAXES
Seven trillion in uncollected taxes. That’s according to Treasury Secretary Janet Yellen. That’s the amount over a decade of time that is being uncollected. Her remarks reflect the White House’s resolve to collect taxes from high earners and big firms. The Treasury Secretary said the tax gap could worsen if no additional action is taken. “It’s really a shocking amount of money that’s going uncollected by the federal government and she urged additional action to fetch this money from the wealthiest Americans. She added “We’re trying to make meaningful steps to close that gap.” Seven trillion in uncollected taxes.
Yellen’s remarks emphasize the Biden administration’s efforts to collect tax revenue from the wealthiest Americans and multinational companies to finance $4 trillion in spending programs to overhaul the economy. President Joe Biden is also increasingly saying he does not want his plans to swell the deficit. At the center of Biden’s planned revenue raisers is a provision to increase funding for IRS enforcement. he also wants to slap investors earning above $1 million with a hike in the capital gains tax and raise the top marginal income tax rate to 39.6% from 37%. This will call for tax planning, otherwise wealthy individuals may need Tax Resolution Services. Back taxes can accumulate quickly without proper tax planning, even on those with substantial incomes.
A recent study from IRS researchers and academics found that the top 1% of Americans failed to report about one quarter of their income to the IRS. The research showed income underreporting was nearly twice as high for the top 0.1%, which could account for billions in uncollected tax. The gap between taxes owed and taxes paid could grow if there’s no intervention, according to the Treasury Department. The department estimated that Biden’s proposed $80 billion investment in the IRS could bring in an additional $700 billion over 10 years, possible up to $1 trillion. The impact of stopping future tax cheats would also add to that figure in the future, by preventing future tax underreporting.