DETAILS OF TAXING THE RICH
June 3, 2021 - Douglas Myser
Details of taxing the rich. During his Presidential campaign President Biden stated he would make Social Spending a priority again and pay for it by taxing individuals with income greater than $400,000 a year and on Corporate America. But his proposal is also aimed at targeting wealthy tax cheats who are gaming the system. Putting $80 billion into the IRS to go after wealthy Americans was a start. Those wealthy individuals are going to be targeted for audits by the IRS, but the Collection Division will also get an influx of money to g after average joe on main street. The estimate is that it will bring in between $700 billion and one Trillion over a decade. Details of taxing the rich.
A recent study by economist Gabriel Zucman, including IRS researchers found that tax dodging, especially by the top 1% was a significant driver of lost revenue for the IRS. It found that the top 1% tended to underreport their income by as much as 20% to the IRS. The White House stated that that amounted to lost revenue of $175 billion annually. President Biden also wants to require banks to report more data on the flow of money in and out of the accounts of their wealthiest clients. The information could go a long way toward curbing tax evasion, but banks are likely to fight a provision that would require them to essentially spy on their customers.
A study by former Treasury Secretary Larry Summers found the government could recover as much as $1.1 trillion in lost revenue over a decade. The Biden Administration has said its reforms would allow the IRS to collect $700 billion over 10 years, possibly $1 trillion. The Biden Administration also wants to increase the Capital Gains tax. The argument is that Corporate America and wealthy Americans are using it to it on the sidelines and not be productive. Forcing them to pay more in tax, may give added incentive to some of the brightest minds in America to work harder, instead of sitting back and doing nothing.