Thank “I take the 5th Amendment” Lois Lerner.
1
The Republicans used to be a party of fiscal conservatism. "Conservatism" used to be a meaningful word. Now the Republican party is fiscally irresponsible and "conservatives" are right-wing radicals. Ignoring close to $100 billion in unpaid taxes is beyond stupid. Only the corrupt and pusillanimous Senate, led by immoral Mitch McConnell, can explain the caravan of travesties against the American people.
This ex-Republican wants his country back. The Republican Party should go the way of the Whigs.
14
What do you call it when the budget for IRS audits is cut?
Rigging the tax economy for the wealthy cheaters and against average Americans.
14
It says nobody likes taxation. Perhaps we don’t like it but I for one don’t mind. I wouldn’t mind paying more if it meant a better standard of living for all. Better healthcare, housing, Infostructure, etc....the things that raise all of us up. My biggest gripe is the offshore money. Bring it home and tax it fairly. And tax the fat cats.
12
Nearly 50% of all federal tax filers pay zero federal income tax. The top 1% of earners have never paid a higher percentage of personal income tax. Liberals are never happy unless they’re grubbing for more of other’s money.
8
Yet some how Trump manage to get audited every year.
4
The easy place to find fraud money is anyone doing business with banks in cayman island, Switzerland and Israel.
7
Roughly 2 of Every 1,000 Estates Face the Estate Tax, only the estates of the wealthiest 0.2 percent of Americans. Before Trump’s Congress repealed the tax law, large Loopholes were already enabling many estates to avoid taxes.
This “repeal” was passed under the guise as a “favor” to farmers, but only a Handful of Small, Family-Owned Farms and Businesses Owe Any Estate Tax (80 TOTAL)
The Largest Estates Consist Mostly of “Unrealized” Capital Gains That Have Never Been Taxed
The Estate Tax Is a Significant Revenue Source, by repealing the estate tax, it will cost $269 billion over a decade, the Joint Committee on Taxation estimates, before counting the interest costs of adding to the debt. (more than the federal government will spend on the Food and Drug Administration, the Centers for Disease Control and Prevention, and the Environmental Protection Agency combined)
The estate tax was originally created in 1916 to serve as a backstop to the income tax, taxing the income of wealthy taxpayers that would otherwise go completely untaxed.
The United States USED TO tax Estates More Lightly Than Comparable Countries, now not at all after Trump’s Congress passed the repeal.
Who wins? The Trump Organization, for one.
https://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax
7
If any reader wants to get into action to bring the US into a fairer society, here's a place to start:
https://www.economist.com/graphic-detail/2017/06/01/a-new-study-shows-how-little-tax-the-super-rich-pay
3
I just mailed off my fourth quarter 2018 estimated taxes and felt like an absolute fool doing it.
9
One of the few things, middle class Republicans and High end Republicans have in common, is their hating to pay taxes. They support the rich who have this same vision, even though it is them that will pay the ultimate cost. It's amazing how rage alters peoples common sense.
3
This article shows how much we need regulations (that work) and bureaucrats that implement those regulations, like collecting taxes that fund managing national and state parks and natural resources, doing inspections on infrastructure and food production, etc etc etc. The IRS is just one regulatory agency, and a darned important one, of many that Trump and the republicans are gutting through defunding, along with the EPA, the FDA, the CDC, to name a few, that help, rather helped - past tense, improve public health and safety. The public, you, me, our children, are not only getting shafted by the wealthy not paying taxes, we are getting shafted by the hug loss of public services that should be funded by taxes that are not being collected. Oh but wait, the government is shut down right now anyway! What a great way for the government to save money, by not paying the federal workers who collect taxes. Truth just keeps getting so much stranger than fiction.
2
The only way the republicans win is by lying, cheating, and stealing as per their actions not words.
Tax the rich, tax the corporations, tax all republicans and those who voted for and support them out of existence! What is wrong with this picture? Manhattan NYC back in October 2018, a $250k Bentley drives down the street while a homeless man sleeps on the street and shivers and as the sidewalks and streets fall apart with potholes as well. Rich white men in expensive suites walk around NYC while homeless people beg and sleep on the streets.
Saw on france24.com recently about Venezuelans who are hungry and inflation at high levels and a man wishes that Trump would come there and fix his country, too! Also STOP using the word "President" in front of dictator Trump's name as stolen election, stolen seats. Did we learn nothing from war criminal Bush regime, not ever administration just like the Nazis of the 1930s?!
And how's that global warming denial working out for ya?! Neighbor across the street had his house flooded from torrential rains recently but still is a die hard republican. Fool me once, shame on you. Fool me twice, shame on me. How dumb can you get?! Don't forget the 3Rs who are the enemy not friends: the republicans, the rich, the religious.
And so, tell me again, how President Hillary Clinton would have been worse?! Don't let those who vote for and support republicans ever vote again. The world will be a much better and safer and cleaner place bar none.
7
It’s a rigged game and the IRS need to have equitable e for me the across the board. Maybe we can begin with an “audit lottery”
by social security numbers.
1
Failed45 is prima facia evidence that lax enforcement is destroying America. adequate enforcement would have nipped the entire criminal enterprise in the bud.
1
Perhaps this should be motivation and reason to scrap the current tax code (all of it) and replace it with something like a national sales tax (that excludes taxes on necessities, like unprocessed foods, medical care, and medication)... something that actually taxes wealth instead of income, contains no loopholes for people to avoid taxes, is inherently progressive (since it excludes necessities that lower income earners spend most of their income on), and requires no time or effort (or money) to file. It would allow individuals to keep their entire paychecks and would be collected along with state sales taxes, which 39 out of 50 states already have. It would also be completely fair to everyone and would take the power away from the government to use taxes as a means to control citizens. It would also collect taxes on “underground” income, since pimps, hookers, drug dealers, illegals, and those paid under the table need to buy things too. Lastly, it would allow reduce the need for an IRS to just ensuring taxes are collected (though if you allow states to keep a portion, say 1% of the federal sales taxes collected, the states would have an incentive to ensure federal taxes are properly collected... eliminating the need for a federal IRS). Just a thought.
With all the advanced technology available, how can we not ensure that tax returns are being submitted? This sounds like one of many obvious deficiencies exposed in this article.
1
We can blame congress for enacting loop holes for their wealthy "friends." Sure the represent us, especially those that give them campaign contributions. What is especially galling is the way they exempt themselves from what the put on us.
5
"Punishing the housing market" is misleading. Today's Upshot is all about the problems of high housing costs in major cities. Most homeowners have recovered from last decade's financial crisis and are doing very well now, thanks in part to the many deductions that the poor don't qualify for. If removing them brings housing prices closer to their intrinsic value, then that's a good thing.
1
Working people have little to no say about how this country works. If you are middle class, guess what? Too bad!!!
You aren't rich, so you can't buy a politician to work for you and you probably can't offer them a seven figure low show job after leaving office. Middle class Americans should just accept the fact that your politicians do not work for you and act accordingly. You work for the rich.
3
OMITTED FROM THE 20% fewer revenues collected from the 1%, the fact that Trump has engaged in "social" engineering (AKA anti-social engineering), due to his tax "overhaul" that took the 99% to the cleaners to the tune of $1.6 to 2.2 trillion over the next decade, to give a tax break to the 1%. Then he turns around and starts talking about why Social Security, Medicare and Medicaid must be cut back. Why? Because he consciously rigged the system to empty the coffers of the social programs and load the coffers of the very right who don't need any tax breaks at all! Now you can add another 20% to the lost IRS revenues on top of the $1.6 to 2.2 trillion over the next decade.
6
While I enjoyed most of this article, the following passage is sloppy and misleading: "If their stocks lose value, they can take a write-off. If stocks rise, their maximum long-term capital gains tax is only 20 percent."
Actually, capital losses are limited to a net $3,000/yr write-off. Taxpayers with large capital losses often carry those forward for a decade or more.
As for the long-term capital gains rate, you forgot about the net investment income tax ("NIIT" in IRS parlance). This is the 3.8% surtax created under the Affordable Care Act. Any capital gains to which the 20% rate applies are also subject to the NIIT, bringing the max effective long-term capital gains rate to 23.8% (not including any applicable state income taxes).
While I agree that starving the IRS is not in the best interests of the country as a whole, the argument is more convincing when the facts are straight.
5
To examine the tax returns of complex high income individuals and business tax returns you need well educated tax accountants who can recognize violations of the tax law. Ask any new college graduate who majored in accounting if the IRS is their first, second,or even third choice for a job and they will more than likely say no. If you want a better tax enforcement agency then we need to rebuild the IRS. It is broken.
3
Yet, for the 3rd year in a row, I had an audit letter sent to me for having committed a considerable sum to donor advised funds, correctly each time, used for charitable purposes in good time. What this indicates is that even the agents they have aren't being fully trained.
2
Speaking of taxes, aren't there some tax returns that we should have had a serious look at by now?
Especially now that we are footing the bill.
9
How is it that we are in debt more than ever and at the same time don't bother to enforce the tax code?
7
@Chris Hunter
Multiple wars over the past 17 years, 1000+ military bases around the world, more than 50% of Americans who pay nothing in taxes receiving a govt. check or 3.
4
Is this a joke or what? The most powerful nation on earth cannot provide enough manpower to audit the high income earners? But we are not short of soldiers to fight the costly wars in overseas that are none of our business. If this is not a joke, then we should ask our president and congressional officers why. We should go after those tax dodgers with heavy penalties and jail time. Those rich people cannot get off easily when they are caught. The reporters should ask this kind of questions to all potential presidential and congressional candidates in election time and make their words count. If the elected officers don't want to do that, we will vote them out in the next election.
5
An analysis about this country's regressive tax rate start from the fact that the wealthy are taxed at a 0% rate for compensation in the form of nontaxable fringe benefits. The next step would be to consider the myriad of flat taxes as a percentage of disposable income.
The third step is to try to take into account the amorphous and ultimately undeterminable regressive impact of the cheating and off-shore accounts that are the subject of this article.
2
@Wm Schlecht. Are your fringe benefits taxed?
1
Utilize the 5 Billion that Trump wants for the wall to increase IRS employees and go after taxes that are due. Next increase staff to monitor Medicare fraud.
1
@Jacquie
Use the $30+ billion taxpayers kick in to the IRS that goes directly to illegals and their offspring in every state.
1
I see a large electoral benefit if Democrats during their campaign explain in fear terms and with figures what this supposed populist president has done, in terms of pollution, deficit, throwing billions on the rich, etc. This is a chance that should not be ignored. And start NOW.
1
Our feckless, spineless government allows dubious minority of his supporters to run our country's policy out of fear...what a cowards!!!
2019 can't come soon enough...meanwhile children are dying at the border.
5
Well that's what republicans intended.
2
I believe I've read that the country of Greece suffers in the extreme from this tax dodging and the country is in ruins. The golden era of wealth creation for everyone was just post WW11 where the tax rates were highest and most everyone enjoyed a decent standard of living.
4
This is a very disturbing report to readers who pay their taxes. Let’s usher in the era that ends the pass white collar tax criminals typically get. While we’re at it, let’s include all white collar criminals. Let’s get their money, penalties and fines, and put this rogues gallery behind bars. Let’s beef up IRS geometrically. Let’s pass a requirement that any candidate for president must show years of tax returns.
Or is it okay now for the president to cheat on his taxes? What about the average citizen? Let’s face this with no more willful blindness. If we tolerate cheating behavior in our commander in chief, we place our society and the future of our democracy in peril.
3
This editorial should run as a boxed article on the front page of this paper every day for a month. With the news cycle having the duration of the blink of the eye, it will take that long for most readers to even know it exists. The repetition will attract the attention of other media (as Donald Trump well knows) and then, perhaps, the stench of this story will enrage enough people that a public discussion will ignite a benumbed and distracted electorate.
3
The solution is simple, in years when the gov't runs a deficit the tax rate on the wealthy goes back to 1946. 96%. If the GOP wants lower tax rates, then they have to live within our means.
8
@john 40% of Americans don't pay income tax... We import more and more of these people daily. Not Great.
6
@john
No one ever paid those sky high tax rates, John. To grow the post-war economy, there were umpteen personal and corporate deductions on investments. Reagan did away with a lot of those post-war 1950s/1960s growth incentive deductions and tax shelters once the U.S. slowly crawled out of the catastrophic 1970-1984 inflationary recession.
1
The War on the IRS in its current version has its roots in Reagan's mantra that the "government is the enemy".
That was - and still is - a disguised piece of class warfare.
Only government has a chance to stand up to the power of great wealth. The Republican party makes it its business to belittle and dis-empower government, in the service of those of great wealth.
The IRS is an easy target.
But it also is one of the glories of our Nation.
How many cases of IRS corruption have been found?
Close to zero.
This has a giant trickle effect through the culture.
Do we want to become Italy or Brazil (and countless other countries) - where "everyone" knows that corruption is normal and you would be a fool not to cheat yourself.
Once the ethos of integrity is lost, it is close to impossible to get it back.
Republicans are taking us there.
We should celebrate our IRS!
Shame on Republicans (especially) for undermining it - to feed their greed.
14
Memo from the Department of Silver Linings (San Diego chapter): The Editorial Board makes a valid point. "To pay for the millionaire tax cuts, sacrifices had to be made. So Congress limited deductions for state and local taxes to $10,000 annually. While that generally applies to well-to-do people who can itemize their tax returns, it was also a clear shot against blue states such as California and New York that have relatively high state and local taxes." But on the bright side, that limiting of deductions wiped out the Republican Party's New England delegation in the House of Representatives, and cost them dearly in [drum roll] California and elsewhere. Now we can expect a Democratic House to restore the deductions. Presto!
5
Let's face it: Greedy corporations and the wealthiest individuals are robbing the government of tax revenue, which is essential to run the government.
Over the past several decades, corporations have bought Republican politicians in order to obtain an incredibly low tax rate on their earnings.
In the 1970s, the tax on corporate income made up 30% of the country's revenue. Now we are lucky if it makes up 10% of the country's revenue.
A simple solution would be to (1)vote out the Republicans who enable these companies to get large tax breaks, and (2) again institute a progressive tax rate which will leave the tax cheaters and avoiders with very little to spend on buying GOP politicians to get large, undeserved tax breaks.
Will Rogers said that Money is like manure, if it's deposited all in one place, it will destroy everything. But if it's spread out, it will be productive for all.
Judge Cordozo famously said that "You can have a society where most of the income goes to the very few or one that is a true democracy where the profits are shared, but you can't have both."
5
Neither surprising nor shocking any longer. Someday, honesty and decency will trump Trump and his fellow thieves.
4
When governments tax HALF on your income they are encouraging cheating.
4
do you remember the prosperous go-go years when money was in actual circulation?
I find myself couriously in agreement with a piece by George F. Will. The tax code is so damaged & screwed up that we need to cancel the whole stinking mess and start over again from scratch.
It is well known fact that White Collar crime rarely is prosecuted let alone punished. This situation will continue until we send all the RepubliCON's packing. And make being an anti-taxer considered seditious
3
I'm glad the Times has gotten around to noticing this problem. The clear solution is to increase the IRS budget, as I pointed out in my weekly NewsMax column in early October: Can We Reduce the Annual Deficit Without Raising Taxes? https://www.newsmax.com/paulfdelespinasse/cheats-monopoly-rich-tax/2018/10/09/id/885552/
1
We started the country saying, "Taxation without representation is tyranny." Now we can see that representation without taxation is idiocy.
103
@michaeltide
The top 20% pay 80% of the taxes that keep both federal and state/municipalities operating. The top 10% pay nearly all of that. Half the nation pays zip, zero, zed, nada, nothing...and gets a check or two, courtesy of the top 20%.
3
@Maggie, that sounds like a good argument until you consider how drastically thos taxes have been reduced in the years since Reagan. Then you notice the staggering amount of wealth that has gone untaxed. Even if the bottom 80% are only paying 20% of the taxes, it is still eating a much higher percentage of their income, which is mostly derived from wages, not investment. Many are living paycheck to paycheck without any cushion on which to fall back. Their benefits are being whittled away by an avaricious investor class, and the cost of their health care is yearly increasing. It's hard for me to be sympathetic to your argument that those who reap 90% of the benefits (subsidies, tax cuts, etc) should not be glad to take responsibility for a larger share of the costs. The federal, state/ municipalities are unable to fund essential services, let alone social services, Homelessness is on the increase. The 20% need to pay more (myself included).
24
@Maggie Warren Buffet says taxes should be increased on the 1%. Increasing taxes on the wealthy means they may have to choose between one yacht or two. The working and middle classes no longer own their homes, can't afford to send their kids to college without loans and have no money for retirement. Which of these two groups should be taxed more?
16
The law is written quite literally by the wealthy for the wealthy, Most of our Congressional representatives and Senators are millionaires, so it should come as no surprise that it favors the wealthy. It favors business to extreme levels and goes to absurd lengths to make sure property investors need never pay a dime. Salaried workers on the other hand are expected to hand over 1/4 or more of their earnings without so much the blink of an eye.
2
@Jonathan
That bit out of everyone's paycheck is for retirement benefits collected after age 62+: a check and Medicare. Because...until that set-up elderly Americans were destitute and resigned to the gutter or pawned off on adult children.
Keep in mind that it is Republicans who starve enforcement agencies including the IRS!
2
wow! what a simple solution, blame the IRS. pay no attention to the man behind...all 535
I am not rich, but comfortable, unless one considers my recent losses as my retirement nears, then, no comfort. But, I never complain about paying taxes, except Alternative Minimums, or our lack of true tax reform. Add, now, chasing near-poverty workers to my complaints, please. Our president gets no praise for any "great reforms" from me. Our president is driving this nation to the ground at break neck speed and boasting. It's nice to know his "great tax reform" are operating at peak failure, though. Our president will cause an amoral God to take matters in hand.
3
Wait for a Robespierre
2
shrinkiung govt incl the + especially the IRS has been a gpoal of fringe far right extremist groups ofte sponsorder by the Koch Brothers. No wonder.
It isn't enough to lower their obligations for having access to possibly the safest place for mi=oney in the world. When asked to pay their obligations, they actively shirk their duty, obfuscate, and act like Donald Trump, or even better Leona Helmsley (Little people pay taxes)
well Koch et all : I am a little person and I pay taxes. And I cannot wait for the chance to balance the odds a little more in the American majority's favor.
So just one question dumbpkopfs:
with little money in the government, how exactly do you propose to safeguard your acquired stealth wealth? With a payer...oy doing the good old fashioned dishonest American rich person's dance...and hide it?
VOTE DEMOCRATIC and throw the cheats on their behinds.
4
@adam stoler If you pay taxes you are not a “little person”. 50% of Americans receive more in benefits and transfers from the government than they pay in taxes and another 30% are at break even. So if your tax outlay is greater than the benefits you receive you’re in the top quintile. Hardly a “little person”. How do you propose to safeguard your stealth wealth?
4
Who wrote this? It is so incorrect and flaws so large, you can drive a car through them. Maybe hedge funds or other institutions can write off their stock losses on certain accounts; but as an individual investor, no matter how large my losses are, I can only write off $2,000 or $3,000 worth of losses per year. Ask my accountant. If your losses are bigger than that, like we experienced when the market collapsed when Lehman & AIG failed, the deduction is set at $2,000. Yes, you can carry over the losses to the following years, but you are only allowed a set amount of deductible losses. However, if you make a killing on a hot stock and hold it less than a year, the tax on your appreciation is 30%, if held more then a year, it drops by 5% or 10%. Gold & collectables are taxed at an ever higher rate because they are not considered an "investment". People holding mutual funds and indexed fund are going to in for a shock when their tax bill comes in because of the turbulence and the churn in portfolios we've experienced in the last month. I'll be taking my deduction from the collapse in 2008 for years to come.
6
The usual estimate is that the IRS gets about seven times its investment in each additional auditor it hires. Congress is a huge part of the problem. In addition to starving the IRS for resources, Congress writes tax legislation that invites tax avoidance (which is not a crime). The whole system - laws, regulations, interpretations, opinions, court cases, inheritance - is a turgid hot mess.
Someone once described our system of taxation as a magical net that only catches little fish while letting big fish swim free.
3
Of course the lowest tax brackets should be audited most often. They are easy to catch, and the tax returns are simple.
Most important, a country's greatness and international dignity depends on its army. The workers are the soldiers at the service of corporations. The wealthy are the generals. Soldiers must show truthfulness, discipline and obedience to their masters. IRS audits test that obedience.
The wealthy are the generals, and their decisions are not to be scrutinized. America is getting some respect out there, so this ideology must be working.
Where is the down side for the wealthy who cheat? There are some very smart people who create devious ways to hide income in so many places that even if you are caught for part, you are seldom caught for all. It would take a large team of forensic accountants years to unravel all the ins and outs of the tax avoidance business. Then if you are caught, you have a team of lawyers who can out gun the IRS legal team. And finally if you do get convicted, you lose some money. When was the last time that a rich person spent time in jail for doubtful tax schemes.
Little fish are easy, and can seldom fight back.
2
David Kay Johnson reported about 8 yrs ago that the IRS relied on 1960's computers, and caught cheats by diff scores, if you remember those. Put experience tax auditors in place, pay them a move average wage, and you would get back millions for every dollar invested in their employment.
2
I have no love for the IRS as do most people I know. But! Even in the best of times, the IRS lets the rich cheat like its OK. The rich can pay for CPA's and lawyers who specialize in helping them cheat. Where the working stiffs have to line up H&R Block the rich folk's people come to them. In the new tax law, the poor folks will lose the Tax Prep deduction.So no matter if THE IRS is fully staffed or not it is the working stiff that bare the brunt of their enforcement.
4
Once again, the privileged 5% have their own armies to protect them--from the local private firehouse companies, to the federal armies protecting their imperialist profiteering around the globe, to an enfeebled,underfunded (read: end big guvment) IRS which cannot go after their hidden taxable wealth, here and in the Caymans.
3
America has just mourned the passing of one of our finest Presidents as we struggle under the yoke of our worst president.
This editorial is timely in that it reminds us of what cost George H W Bush his second term in office. Of the same party but of opposite values to Donald Trump, when faced with the harsh reality of a severely unbalanced budget Bush acted in his country's best interests and against those of his base to rectify the imbalance. Bush paid the ultimate price as the American people eagerly bit into the phony apple offered to them by America's Party of Wealth.
The editorial serves as a wakeup call to America, behave that way again and expect the same results which have led to unprecedented wealth distortion and income inequality. Among our first order of business, should we sweep Congress and the Presidency in 2020, needs to be a retraction of the 2017 tax cuts and restoration of the state income and property tax deductions which affect ordinary Americans, plus reenactment of a fair tax burden upon the wealthiest who use most of our infrastructure services.
This time around, punish the Republicans for acting so irresponsibly a year ago when they forced a contra-justified tax cut for their wealthiest donors which was hastily drawn up behind closed doors with no Democratic input and has resulted in record budget deficits and debt levels as ordinary citizens struggle even more. Reward Democrats for beefing up the IRS budget to go after our wealthiest tax cheats.
5
Whatever happened to Trump’s promise of a middle class tax cut? HA!
2
Of course no one likes the IRS. No one ever likes paying a bill or getting a letter about an error...
That said, we are all better off when all people are tax compliant. It means Congress can raise the money they need for whatever their spending project may be in a manner that is fair and equitable, and efficient.
Do you know who gets hurt by an underfunded IRS? Law abiding people like me. Not only do I feel like a bit of a sucker (or at least not smart, according to the predident) but my taxes have to be higher than they would need to be to compensate for people like the president.
3
Audit everyone who makes over a million dollars a year for at least two years running.
Don't audit anyone who makes less than $50,000 annually for at least two years.
5% bonuses to the auditors based on all taxes that have not been paid and they catch during their audits but only for those returns with over million dollar incomes.
Enforce the criminal penalties for the cheaters and put them in prison. Dems should make a major campaign issue of this, point to the flood of criminals that have invaded the White House under this administration and deport them to prison.
2
The Swiss have one of the highest standards of life on the planet. They have beautiful cities.
I had the thought once that they are not invaded during major free-for-all-upheaval world war, not because they say they don't want to be involved, but because everyone keeps their money there.
The Swiss live well off hiding money stolen from the poor worldwide, drained out of Africa and Asia, earned through addicting the unfortunate. Sorry, Swiss. You are involved.
End Swiss bank anonymity and you end so much needless suffering.
With an annual deficit of around a trillion dollars that 3 billion a year going uncollected hardly seems significant. If the electorate doesn't care about the huge increase in debt every year why should they lose sleep over a few billion in unpaid taxes?
1
It is no 'accident' that IRS audits are down due to 'budget' cuts for audits. Corporations and the wealthy already many benefits, written into the tax code and yet they still want to cheat and not pay the taxes they owe. Yet these are the very corporations and individuals who hold themselves out to be 'super patriots'. They are overly enthusiastic in praising the virtues of America and showing the flag but paying the taxes they owe is not one of their patriotic duties.The only statement that Trump made during his campaign for president was the it is a 'rigged system'. Trump has done nothing to fix it but added to the problem by unprecedented corruption throughout his administration.
2
@rolfneu The Clinton Foundation. Power for sale.
The "patriots" who have gradually used their political influence to diminish the IRS' ability to enforce the tax code are no patriots. They complain loudly about the deficit, perceived government wasteful spending (excepting the military, of course), even as their highly compensated tax accountants exploit every single applicable loophole.
Just look at the decrepit roads, bridges, mass transit, airports, schools, hospitals, etc. We're supposed to be the wealthiest country in the world, but much of this country doesn't look it!
7
This is not a new phenomenon. The GOP's answer to decreasing regulations and bureaucracy is to eliminate oversight from the very institutions designed to protect the public good.
3
It would be easy for Congress to compromise with Trump on the so-called border wall, which exists in large part, anyway, as your own reporting shows. It is they who forced the shutdown.
2
Much hand wringing in the NYT about personal income tax rates, but almost none about corporate taxes, which used to comprise almost 35% of all US receipts, but now are only about 9%. It is the ascendancy of unaccountable corporate wealth that is gutting America's ability to fund social services. To focus on individual taxes, as bad as the compliance and enforcement maybe, simply misses the much bigger fish, which is what corporations want. ie the Irish-Dutch sandwiches (so much for EU tax fairness) of Google, Apple, Bain, etc. where 90% of corporate income is made by 1-2% of the companies 'workforce.' Unless corporate tax laws are changed, the only way to enforce any taxes on such companies will be a threshold based VAT (15-24%), which many other countries now use.
14
I think if the Democrats could unpack the tax cuts that the Republicans put in place and really focus on (and publicize) how obscene the decisions were, it might help the American people to understand what it was stuffed with. Because the tax cuts, in combination with what's gone on at the IRS, really should be clear to anyone before they vote.
7
The solution is easy: Give rewards to those who expose tax cheaters. Make the reward 25% of the sum retrived by the IRS. Problem solved. Bigly.
102
@toom ... not ... at NYT, please
There's no merit, here, definitely no tangible solution, at all. We may as well legitimize, then reward vigilante behavior. Is this just what we need, more hate? The real question associated with exposing a cheat would be getting the legislation through the US Congress, perpetual Lame Ducks. Or, would you expect an executive order to do the trick?
2
@toom Imagine the misuse to which this could lead. Your neighbor and you have a fight over the noise at your barbecue, and before you know it, he has denounced you to the IRS out of spite. Even if every penny of tax due has been paid, you would suffer a punishing audit, that might last years. And if you attach bounty to the picture, it only gets worse. Problem made worse, bigly.
6
@Ambroisine
So, confine the audits to BIG cheats like Trump, Mnuchin, Ross, most Senators and Congressmen, Traders and CEOs. We could probably afford to educate our children with the takings and a reward for this should not be out of the question.
If a criminal can get preferred treatment for "flipping" on another one, why not here? A crook is a crook is a crook. Little guys will often cheat, but if we collect from the Trumps of the world we can afford to hire lots more IRS auditors to solve that issue.
8
How can the Republicans not be willing collaborators in a huge conspiracy to defraud the people of the United States? It's theft in plain sight.
6
The dimwit in the white house should collect taxes properly and Congress should use the revenue to fund climate change mitigation, public transportation, infrastructure. These tax facts make me so mad because I and many others play by the rules while our world is destroyed by the cheaters. The cheaters will be most able to survive the destruction because they have the money to-the money that they stole from US by not paying their taxes.
5
All part of Trump's Master Plan (insofar as any exists). With fewer auditors and agents the Thief-in-Chief stands a better chance of not being audited. His crimes are undoubtedly ongoing and his return should be top priority for what's left of the IRS (and those of Mnuchin, Ross, Koch and all of the Trump Cabal.
With ethics and the rule of law being ignored in this criminal administration, the chances are excellent that between the SEC and the IRS, most of the American Oligarchs are massively cheating.
Here's a great chance to claw back much of their ill-gotten gains an expose the deliberate loopholes they legislated into the new tax codes - rewards for themselves for having done such a "great" job with their theft.
GO GETTUM GUYS AND LADIES - you hav the power of audit. Use it! Let Justice prosecute and save the big guns for the new House and Mueller.
2
Apparently the editors are unaware that it’s computer algorithms that decide who gets audited. Perhaps Obama shouldn’t have put the IRS in charge of Obamacare.
3
@Jackson
Computer algorithms don't "decide" anything - the programmers who write algorithms, and their bosses, do. Given the budgetary stresses of the IRS, one would think more weight given to the bigger fish would be a move toward self-preservation of the agency.
Pretty sure it's not the IRS that is "in charge" of Obamacare. Not sure anyone is, given the way it's been artlessly hacked together by my state.
Focusing on both these issues would be so much healthier for us than obsessing on The Wall, the mad red hatters, the peccadilloes...But we love drama.
1
The algorithms are written by people. Moreover, there's nothing that says an algorithm is fair or balanced.
Nothing new under the sun...rob the poor and protect the rich...
Robin Hood in reverse, like it's not enough that they already have a detailed security protection 24/7 to guard their stolen fortunes against the masses, once again we just live in a modern feudal system.
Also, does anyone have any idea about mystery subpoena fight on the SC that connected to Mueller investigation...
Unnamed company owned by foreign government
Company held in contempt of court, fined
Claims immunity from subpoena under federal law
Federal appeals court rejected claims
The web of secrecy is beyond anything we've ever seen...the speculations are flying around, the entire federal court floor is close.
What the hell is going, inquiring minds want to know.
5
@faivel1
Why are the "poor" entitled to the hard earned work product of other families that don't breed like rabbits, actually do educate their kids that become productive taxpayers, and don't crank out dim generations parked on every form of welfare and/or in prison?
1
That as many people claiming the Earned Income Credit are audited as people earning between half a million and a million dollars is appalling, but it does not stop there. Lower income people's tax returns are reviewed when their children apply for federal financial aid programs for college - and if there are errors in those returns, the student or their parent are required to amend their tax return before the student can receive the financial aid they are eligible for.
Most of these "conflicting information" reviews are done on lower income students because the Department of Education is primarily concerned with the accuracy of the Pell Grant program, a grant for low income students.
I don't have a problem with the Department of Education wanting its Pell Grant program funds to go to the right students. My concern is that by reviewing the tax returns of these student and only these students, the ones who are most likely to struggle to meet their financial obligations to their college anyway and whose families do not have the resources to cover their costs during the conflicting information review, become more likely to take time off - or drop out with student loans from earlier years and no degree.
Because of the incomes of the families involved, these reviews net no more than a few hundred dollars each, at the upper end. Yet reviews that could net thousand of dollars are not undertaken, because higher income students don't receive Pell Grants.
5
Don't worry, the Democrats will be after everybody's money soon enough.
5
Hard to believe that there are some who are more concerned about the worthiness of food stamp recipients. Would be great if we could match every food stamp cheat with a tax cheat!!!
7
Heck, I keep wondering when they are finally going to cut out the IRS as middleman and have us send our taxes directly to GOP donors.
16
It can be that the financially wealthy among us, regardless their so called political party affiliation, are inured to the thought of charity, considering any such donation as uneeded support for those who should be working. Any excuse, no matter how implausible.
The President is just the willing fall guy who thinks, probably correctly, that he will walk. In addition he and his family will finally become billionaires.
Oh America! Ain't it great?
3
Unfortunately, there are several items about the EITC program that makes it an easy target for an audit. The cost is fairly large at projected cost of $72 billion for 2019; it always results in cash refund, since it is a tax credit; and the recipients are the working poor who lack the resources or are unaware of the resources to fight the audit. The IRS targets the EITC recipients because they are relatively easy to audit than millionaires, both in terms of tax law complexities and resources available to fight the audit. Publications say about $12 -$14 billion annually of the EITC payments were made improperly to people who did not qualify and are subject to clawback under the audit. Compare that to about $10 billion collected in total from going after offshore accounts (FATCA), and some publications have said audit cost under FATCA have exceeded the dollar recoveries.
3
@Terece
FATCA - certainly the best acronym ever to out of the swamp.
I have a solution to the audit costs exceeding dollar recoveries from the fatcats - just raise the fines to cover the government audit expenses, as we do with court costs. Maybe higher penalties would reduce violations going forward, also. And meanwhile, direct the IRS to get off the backs of the working poor. Why not?
This was the one area of government where Mr. Trump was uniquely experienced and could have provided an irreplaceable expertise to reform the system. Instead he failed at leadership on this too.
2
This is emblematic of Republican values. Serve the rich, cripple the legitimate collection of taxes, cut taxes to the bone and then make the case for cutting entitlement programs (S.S./Medicare / Medicaid/Food Stamps, etc.) to offset the humongous debt that they have added through their reckless financial management of the country. When in God's name are American voters of all ages, ethnicities, races, religious affiliations going to wake up and call these jerks out?
15
"New investigations of people who don’t file dropped to 362,000 last year, from 2.4 million in 2011. That costs the Treasury $3 billion annually in uncollected taxes. More than $8 billion in back taxes did not get collected in 2017....."
Here's the deal Dems should make with Trump: Fund/Staff the IRS properly and you can pay for your wall thru the additional taxes we collect.
3
This NYT report should be republished by AARP, union publications, PTAs, ReadersDigest, and other magazines and internet sites read and followed by Americans whose incomes are reported to IRS and state tax boards on IRS W-2 form. Learn from Facebook and Amazon.com make certain that your message reaches its entire targeted audience. For the affluent middle class and the “trust fund children” of the wealthy who read the NYT, this scandal is old news.
4
I spent over 30 years as an IRS tax auditor/tax compliance officer before retiring in 2005. Back in my day the examination division didn't focus on the lower income strata unless it was certain self-employed/cash-based segments that were notorious for under-reporting income or over-stating expenses. We focused instead on higher-incomes since that resulted in greater assessments. The editorial is correct in that IRS enforcement activity has dropped dramatically over the years due to the GOP's "starve the beast" philosophy.
16
Once again I ask: when it comes to the vast sums the wealthy take home, are we really sure we should be using the verb "earn"?
14
Only the little people pay taxes and get audited and punished. There is no further proof needed that Plutokleptocrats own us outright and run everything. Indeed, the government is merely an intermediary to transfer money from tax payers to the wealthiest tax dodgers who benefit and exploit society the most.
Making matters worse, trump the artful tax dodger is no different than all the other wealthy cheats we have to pay for - if only The Times had the resources to investigate and write an expose of all the wealthiest unpatriotic cheats exploiting this society as they exposed trump and sons.
7
I’d give Trump a one-time $5 billion for his wall in exchange for a $3 billion yearly increase to the IRS for tax enforcement. I think that would have an interesting effect on Congress— on both sides.
5
I thought Republicans were going to get rid of special tax treatment for different forms of income. Didn't happen. They held both houses and the presidency, and with that advantage managed to wheedle a huge tax cut for the wealthy. Not a peep about tax fairness. One begins to wonder about their commitment to the bulk of tax payers earning wage income.
I advise all wage earners to focus on this as an election issue, regardless of political tribe.
8
Ditto for SEC investigation and enforcement of Wall St. (funding always cut); investigating Medicare fraud at the institutional level (funding always cut) -- like almost every federal agency that has investigative and enforcement powers almost always cut or curtailed. It should be a no brainer -- fore every dollar spent on investigations the federal coffers get multiple dollars back. How's that a bad deal for us the taxpayers, investors, and consumers? And, since the cheaters have the power, and this as a reason for maintaining their power, not sure this will ever end. Couched in getting government off our back, or making it easier to do business, saving jobs, etc. convinces voters who like on so many issues vote against their own interest. This has been evolving for decades, and glad to see it once again highlighted in the media. At least until the next tweet....
2
How can an IRS employee who audits someone making less than $20K a year sleep at night? Go after the wealthy starting with trump, his family members and wealthy supporters. If allowed to flourish, our weaknesses as a nation will destroy us.
210
I agree, DD. They probably think they are just doing their jobs.
Having given a lot of thought as to how we can solve the HUGE problem 99.9% of us have with wealth inequality I think the best solution would be to make the first $35,000 dollars of INCOME - not wealth - tax free and to giver tax credits for anyone earning less than that.
Progressive tax rates would be applied for INCOME AND WEALTH for anything above $35,000. That would level the playing field.
Perhaps $35,000 isn't the correct no-tax amount but it should be sufficient to giver relief to the working poor who are losing ground every day because of the rising cost of everyday needs.
33
@DD
They go after the little guy because they are the least likely to fight back. They can't afford high paid tax lawyers that rich people can. Why do you think that the IRS gave up and allowed Scientology to be considered a "religion" and thus tax-exempt? Because they got tired of spending millions in legal fees fighting them. As the article says, the rich simply outlast them. As in our justice system, it is an unequal system favoring the rich.
22
Most audits are computer generated based on “matching.” The software “knows” what was reported on W-2s, 1099s, etc... That means lower income folks who work for a living are most likely to be audited for errors in reporting. The IRS doesn’t have enough auditors to manually audit high income taxpayers with more complicated returns. So, it’s not an agent that sent the audit notice. It’s a machine. Cheaper. And unfair.
7
Here's the biggest problem: While there is a bigger potential payoff from the wealthiest tax-cheats, they also have a lot more money and will fight tooth-and-nail for any enforcement action. It is the poor who are more likely to just accept what they IRS since they are already skidding on the edge financially. So sad!
5
@Lara: Many people rely on tax preparers and don't even understand what an IRS demand letter is about when they get one.
Even when it was more properly funded, the IRS has failed to identify and penalize flagrant tax scammers like Trump and Manafort. They've escaped paying their fair share for decades. Republicans want to make sure that "job creators" like them are allowed to continue.
9
A gutted I.R.S. may be a planned mafia deal, so to keep a dichotomy of the poor (with no choice but paying their taxes, hoever meager their earnings) and the 'rich and powerful', able to hire smart complicit lawyers to escape control from paying their fair share. I understand we all are corruptible when given a chance, but why must we debase ourselves by de-establishing the need for sensible regulation? Defanging the I.R.S. by cutting their funds to work as designed is one factor in mantaining the deep inequality in this capitalistic system. That's why a Donald J. Trump can remain a crook, unaffected by justice's arm, and impune to morals. Why is it we cannot gain access to Trump's tax returns and confirm our suspicions? Pogo was right, 'we found the enemy, and it is Us'. Have we fallen in a sad numbness of 'anomie', where we lost the will to change this institutionalized violence, and establish a true democracy? Was Orwell right when he suggested ('Animal Farm') that 'we are all equal...but some are more equal than others'?
3
The article lambasts the rich until we get to the rich in California and New York who have lost their mortgage deduction. Then they are just well-to-do. This opinion piece is all over the place.
3
@Frank
if you read throug the comments the SALT deduction reduction in the 2017 tax scam are affecting folks in Washington State and Tennesee. And those are just commenters. It has hit anyone who has worked hard to get where they are and been prodent in managing their money
The latter is something the republitrumps and trump have never been: prudent with their own or our money.
1
Our esteemed President said we should avoid paying taxes whenever possible. Who are we to argue with a stable genius?
6
Slashed taxes and a non-functional deconstructed government are the objectives of the super-rich right wing extremists who financed Trump's suspect election with Russian assistance. The voter revolt must continue in every election going forward to restore decency in Washington. The Republican Party has become so corrupt not real American can support them.
7
U.S. Holiday Retail Sales Are Strongest in Years, Early Data Show.
Well according to wise men of NY Times Editorial Board all these purchases were made by few billionaires.
4
@Batuk Sanghvi
Don't be deceived, that shopping frenzy is just all us thousandaires, trying to spend our ill-gotten EITF before the IRS claws it back. The billionaires can take their time buying bigger swag, and politicians, while their lawyers duke it out with the IRS.
Didn't stop them from coming after this little fish. Tax filed with a well known computer program did not pick up some paltry earnings on various stocks to the tune of about $2,500.
Kicked to the curb in '08, no income since and only savings to live on. With interest and penalties, amount owed about $3,500.
Yet a whale like trump writes off almost a billion, Kushner the slum lord pays zero because they cheat.
Furious doesn't begin to cover it.
275
@Deb Computer programs don't "pick up" anything. You supply the data. They integrate it. If you misuse software, it's on you. If $2500 in earnings was 1099ed to the IRS, you got a copy as well. That's how they know it happened. That's totally on you.
20
@Deb. Cheat? How naive you are. It’s called taking advantage of the tax laws.
8
@Ernest Montague - I DID supply the data exactly as received from highly rated and well known investment firm. IRS said it didn't show. I may not be as brilliant as you when it comes to these things, but I don't cheat, am generally not thought stupid and follow instructions carefully.
35
Tax Revolt. Don't pay taxes without full transparency. Wall Street's pretty good with quarterly earning reports. How's about a yearly Tax Payment Report for it's companies and it's executives? And those about PAC 'donations'? Not acceptable without Tax Returns.
Consumers are hit with an ever increasing barrage of price gouging for basic 'necessities' - rent, phone, heath insurance, food, tv content/entertainment & other 'addictions'.
There is only one possible leverage available to us mere mortals - stop paying.
Consumer Revolt.
But it'll never happen. 'They' have perfected the arts of obfuscation and propaganda to the extent that mass agreement on any single topic is impossible.
1
@Mike
Most Americans already don't pay taxes. They do collect beaucoup for all their kids and usually get one or two govt. checks.
1
“Dodging taxes is as old as taxes themselves.”
“Mr. Trump has employed systematic dodging for decades”
Tax avoidance (or “dodging taxes”) is not illegal. Tax payers are fully entitled to arrange their affairs to minimize taxes.
If a taxpayer’s taking advantage of IRS regulations that work in his/her favor – such as bonus deprecation – renders him/her a “dodger”, then change the regulations. This is the point Donald Trump made to Hillary Clinton during the debates. If she didn’t like him – and others - taking advantage of the depreciation regulations, then Bill Clinton should have changed them.
But let’s not forget that those generous depreciation deductions encourage investment in productive resources – and that’s beneficial for the economy.
The Dems get the House in January. Let’s see how they address the issue of “favorable” tax regulations.
5
Take it up with legislative branch who is in charge of legislation. I'm no fan of Bill Clinton's, but your finger pointing is misdirected.
2
" If you are claiming the earned-income tax credit, which provides cash for people who typically earn less than $20,000 annually, you are as likely to be audited as someone earning between $500,000 and $1 million.”
We typically think of a tax credit as an amount of money that can be deducted from what one owes in income taxes. Most readers of this newspaper do not realize that people who earn so little that they do not need to pay income taxes can apply for this so-called “credit”, and receive it as cash. Congress grew tired of families remaining on welfare for generations, and decided to turn welfare into a wage supplement for the working poor. As Congress put restrictions on welfare, it instructed the IRS to make payments to the working poor. Congress turned the IRS into a welfare agency.
The IRS supplements the earnings of the working poor with the Earned Income Tax Credit and the Child Tax Credit.
Even the undocumented receive tax “credits". Way back in 2010, the Inspector General for the Treasury Department determined that the IRS had paid $4.2 billion to them in just one year under the Child Tax Credit, and concluded that it helped lure them to the U.S.
The IRS should not have to serve as a welfare agency.
3
@ann
Those taking the EITC get audited more often because it is highly prone to fraudulent reporting: inventing children or are illegals who pay $0 but know how to work the system to get a check for each of their 5+ offspring.
1
If the Obama Administration didn’t use the IRS as a tool to intimidate and punish its political enemies in Nixonian fashion, the public would more broadly support the IRS.
Few on the conservative side doubt the IRS will be weaponized again under the next Democrat administration.
3
@EGD Looking forward to enforcement of tax laws by a strengthened IRS.
1
" If you are claiming the earned-income tax credit, which provides cash for people who typically earn less than $20,000 annually, you are as likely to be audited as someone earning between $500,000 and $1 million.”
We typically think of a tax credit as an amount of money that can be deducted from what one owes in income taxes. Most readers of this newspaper do not realize that people who earn so little that they do not need to pay income taxes can apply for this so-called “credit”, and receive it as cash. Congress grew tired of families remaining on welfare for generations, and decided to turn welfare into a wage supplement for the working poor. As Congress put restrictions on welfare, it instructed the IRS to make payments to the working poor. Congress turned the IRS into a welfare agency.
The IRS supplements the earnings of the working poor with the Earned Income Tax Credit and the Child Tax Credit.
Even the undocumented receive tax “credits". Way back in 2010, the Inspector General for the Treasury Department determined that the IRS had paid $4.2 billion to them in just one year under the Child Tax Credit, and concluded that it was helping to lure them to the U.S.
The Earned Income Tax Credit also has the reputation for rampant abuse.
The IRS should not have to serve as a welfare agency.
1
I am sure that I am Not the only reader who over the year has wondered why it took a Mr. Mueller to reveal the tax evasion/cheating of Paul Manafort. His scams were going on for years, more than a decade even, and nobody noticed?
This article clearly identifies one of the reason's why rich people can play all sorts of 'games' with their income to beat the system.
A system rigged to benefit the wealthy.
As the little people now start receiving their year end statements to send to the IRS with our 2018 tax returns, may we reflect upon how much/what tax rate will President Trump and his ilk pay?
Oh, that's right, we don't know because his information is being purposely hidden. Given this article, I do not think there is any audit of Trump's taxes.
The little people are being played for the suckers we are.
1
The House should pass a bill requiring that the IRS audit all returns over $1,000,000 or audit on a 70/30 ratio those high income returns vs. low ones. That money could do a lot to fund infrastructure, reduce the deficit his tax plan created or even build the Trump wall. Start with his returns, his family and his cabinet.
4
Ahh, but think of this from the politician's point of view. By lowering taxes on the rich and then effectively emasculating the IRS, there is more money for the wealthy to donate to election campaigns. As long as this mutual benefit pact continues, the rest of us will cover more than our fair share of government expenses.
Seems to run counter to making America great again.
7
Trump's tax returns probably don't differ much from Kushner's. They reduce taxable income to almost nothing with inflated depreciation deductions for real estate that is appreciating.
At the lower boundary of the 1%, Trump's tax "reforms" wiped out the bulk of tax deductions.
2
This has been "old news" for many years. I can recall studies from the 1970's about billions that went uncollected because the IRS did not have adequate resources (people, computer systems, etc.). (After all, who really wants to work for the IRS?) Politicians, of all "stripes," need to stop playing the "everybody-hates-to-pay-taxes" game, and start asserting how it is everyone's privilege, opportunity, and obligation to pay taxes, in order to keep us safe and make us better. A few, relatively minor, cuts from the DOD to better fund the IRS would go a long way to make the system work better for all, even the wealthiest.
6
Quoting the article "While that generally applies to well-to-do people who can itemize their tax returns, it was also a clear shot against blue states such as California and New York that have relatively high state and local taxes. "
Relatively high? CA is the highest in the nation at 12.3% for those making under $1M; those making over that amount the rate is 13.3%. Why should those whom live in all other states pay the freight for the Federal write off?
2
@Indy voter
"Why should those whom live in all other states pay the freight for the Federal write off?"...
Perhaps because they don't and it's not that simple. California, like NY is one of those states that gets less than a dollar back for every dollar paid into the Federal treasury.
https://www.theatlantic.com/business/archive/2014/05/which-states-are-givers-and-which-are-takers/361668/
It's interesting how the biggest complaints come from those living in states with the lowest taxes and the lowest contributions to the Federal government relative to Federal monies coming their way.
6
@Indy voter
By your logic, why should blue states pay more to make up for the fact that red states take more money out of the federal coffers than they put in?
3
"Republican playbook: Enrich wealthy individuals and corporations with tax giveaways that balloon the deficit, justifying spending cuts for health care, education and infrastructure, then amplify the process by not holding high-end taxpayers accountable for the amounts they owe."
One crucial step is left out of this playbook: Then the wealthy individuals and corporations use some of this windfall to fund Republican political campaigns, keeping them in power so the tax giveaways, spending cuts and lax enforcement continue into the future. Repeat as necessary.
6
@John: They also fund spoiler Democratic candidates, disinformation websites, and political dirty tricks.
1
Once the smart, qualified, experienced Socially Conscious Women and men WE THE PEOPLE hire/elect take office one of their first steps must be to hire thousands of highly qualified people to relentlessly audit the 0.01% and 10% wealth holders to claw back the wealth they have stolen from us.
They can then refer the crooks to OUR law enforcement agencies for prosecution and imprisonment.
Get their beloved Guantanamo Bay ready. They will soon be locked up there for decades.
5
The major challenge for the IRS is the Congress. There has to be an agency of the government which collects the funds due to the government. Yet Congress continually demeans and undermines the agency with ridiculous charges and hearings. Whenever there has been a hearing, the only finding is a rouge agent, not wide spread fraud or embezzlement. Without proper resources, there cannot be properly trained personnel who understand the complicated tax law which can be administered fairly for all citizens.
The other challenge is that Congress pass complicated and unintelligible laws which citizens can't/don't understand. I am a retired CPA who specialized in tax. When my clients complained about the costs of preparing their tax returns as we now have computers "to do the work". I explained that yes, the computer does a lot of the work but the amount of time required to learn and understand the law so I could prepare their returns properly expanded exponentially during the more than 30 years I was in active practice.
Finally, I would like to remind us all of the quote by Oliver Wendell Holmes on the front of the IRS building in Washington, DC. TAXES ARE WHAT WE PAY FOR A CIVILIZED SOCIETY.
5
I’m a former government tax attorney. The system is flawed when adversaries become future employers. Furthermore, programs such as settlement require minimum thresholds which pre life the poor and invariably result in discounts for high net worth individuals. There’s so much bias against poor people that you question whether the mission is revenue collection or equal enforcement of the law.
1
Do you actually believe they go after the rich even if fully staffed? People with those kinds of resources are virtually untouchable and largely ignored by the IRS because they either have the means to fight back or the connections to stay off the radar in the first place. Your sitting president and his family are a perfect example ... The IRS would rather focus on the small business owner who makes a mistake than a big fish who actively "avoids" their fair share - no matter how well the IRS is staffed...
7
We could easily afford to put another billion or two a year into going after these cheats, no, criminals, especially if considering the estimates of what they are stealing from our nation. These folks are a step below gangster Al Capone who went to jail not for murder, but for being a tax cheat. People perpetrating these tax frauds belong in jail to deter others, but that won't happen as long as the gangster in chief, Trump, has set such fine example and their illegal behavior is tolerated. Tax cheating is a crime!
2
Grafting your taxes is as old as apple pie in the US. Your President, as you mention, takes pride in that anti social attitude.
I suggest that the NYT make avoiding taxation your purpose this year. Revealing the inadequacy of the kind of politicians and grifters who make these anti community decisions.
The US can afford a civilized society, it chooses not too!
1
Oh, that's OK. Canada and Mexico will pay for 'the wall',
... and the tax cuts; just ask Donald. (Any bets he doesn't pardon himself?)
2
In a debate with Hillary Clinton, Donald Trump said he was "smart" by not paying income taxes — and argued that if he did, the money would be "squandered." Don, give back your unpaid millions of back taxes. You can show us how not to "squander" the money by using it to finance your wall with what you rightfully owe to the American people. The penalties alone for your decades of tax invasion would be a good start for some of those "beautiful slats." A new tax year is upon us. Put your money where your mouth is.
7
Unsurprisingly The NY Times once again vituperatively blames the rich. No mention that most of the rich pay their taxes and pays most of the tax burden. Nice to know we can not judge someone by color, sex, gender, sexual intent, origin or any one dimensional metric of virtue. Except of course if given a bank balance we can ascribe all manner of evil while bathing in a warm glow of self righteousness
Director’s law predicts why tax audits will fall on the poor and the rich. Look it up.
God forbid we audit the middle class.
Remember one of the biggest reductions in uncollected taxes happened when social security no’s of dependents had to be added to returns. I doubt the slaughter of the innocents was confined to the 1%
But please, let keep beating our hackneyed drums of separation. The country is sooooo much better for it
6
@fc123
Just curious; how do you feel about your wealthy brethren who choose to ditch fortunes in off shore accounts without paying taxes required by law? How many fast food workers do you suppose behave the same way?
Most of us work for a wage. Our employee tells IRS what we're paid, our bank reports how much interest we earn. We pay our taxes. People who make income from wealth are not similarly scrutinized by the system. It turns out, sadly, that they cannot be trusted to be fair. They cheat. That makes the rest of us furious. Even worse, these self same wealthy spend enormous amounts lobbying for tax exclusions benefiting their special form of income. Then they cheat some more.
Please spare me your rich man's rage. You have nothing to gripe about because paying your taxes isn't going to take food off your plate. If you worry about class war, take it up with a country club member bragging about their latest maneuver to avoid taxes. Personally, I feel like grabbing a pitch fork and storming the Bastille.
12
@Some Dude I think you missed the point entirely. Very few of the “wealthy” maintain offshore accounts to hide income and assets. There were virtually no Americans included in the Panama Papers’ list of global tax evaders. And as the vast majority of wealthy Americans don’t commit such tax fraud, they no more applaud such behavior than their less wealthy compatriots.
Also, 50% of Americans pay less in taxes than they receive in benefits and transfers, while another 30% break even. If you’re paying more in taxes than you receive in benefits you’re in the top quintile of earners and more likely to be defending the Bastille than storming it.
Lets be forthright NYT........The federal income tax is ,PRIMARILY, the US sovereign GUARANTEE to finance budget deficits......incurred as US Government PROMISSORY debt..... (contracted through Treasury securities and bonds)...... TO THE FEDERAL RESERVE BANK .
Since the Federal Reserve(ludicrously...a NON PROFIT institution) can print US notes and issue US Treasury instruments at will .......... while, simultaneously, (out of thin air) doubling the value of the PRINTED instruments distributed to customers.......by creating,an equivalent amount of electronic debt capital .....as debt to the Federal Reserve books.
Proof that IRS tax revenue is unimportant....the Trump "tax reform" Bill........happily approved by the legislative branch and Federal Reserve......to reduce future tax revenue by TRILLIONS for corporations and BILLIONS for the 1% in inheritance tax "relief"!
Hence and whence..... the need for the "terrifying" IRS hegemony to collect taxes EFFICIENTLY from the HARDEST WORKING AND POOREST American citizens ???
1
But boy, let's crack down on those welfare cheats. (sarcasm)
3
This is an excellent analysis that succinctly describes the failure of the our elected official to follow sound economic policy that benefits the general public. Thank you.
3
Welcome to the new Confederate Oligarchies of America.
2
Salaried workers who vote for republicans are foolish.
14
@Deirdre
One could make the same claim about any taxpayer living in over-taxed New Jersey.
2
It's great to see the NY Times getting behind this story (finally) but it also helps to have some history.
The Republican Party has championed gutting so many federal agencies, including the IRS, going back at least to Presidential candidate Bob Dole who promised to "end the IRS as we know it." Such language and views reflect the view promulgated by President Robald Reagan that "government is the problem." As a younger man, I was flabbergasted at the cynicism of Republicans, and the obvious goal of benefiting the rich by doing away with tax collections enforcement. It was the twin of their constant railing against taxation of the rich through the estate tax (which they dubbed the Death Tax) and promises to cut taxes on sources of income for the wealthy, namely dividends and capital gains.
My issue: Where the hell have the Democrats been all this time? One answer is that Bill Clinton adopted their policies himself, slashing taxes on dividends and capital gains while keeping taxes on "earned income" (i.e., actual work) at higher leves. The American people accepted this, apparently because hating taxes has been cultivated as part of our anti-Socialist American philosophy.
Since the Clinton era, Dems have been focused on Identity Politics, LGBTQA rights, rights for illegal immigrants, and so on while leaving the unfair taxation system intact.
Bernie Sanders wanted to fix this. My hope is that other Democrats will follow up with redressing this unfair situation.
5
I've had first hand experience with the IRS of late. My 2016 refund of over $10,000 is still held by the IRS. Repeated attempts to speak with a genuine human being always resulted in my queries being shunted into the sixth circle of voicemail hell. There's simply no one home anymore...I finally resorted to a google search "Getting a human being at the IRS" that was immediately successful...(https://ttlc.intuit.com/questions/2647542-i-know-the-irs-phone-number-is-800-829-1040-but-how-to-do-you-get-someone-to-actually-answer-the-line). This is what we've come to. This is NOT a functioning government. Throw the bums out!
5
As a salaried worker married to a salaried worker this makes me furious.
All income should be taxed as ordinary
Income.
300
@Deirdre No it should not - investment is the driver of progress in a capital economy. It makes sense for the federal government to incentivize private investment with reduced tax rates.
4
@Brian - I agree, but only if we can be sure that those 'incentives' are not abused to the point where they become loopholes. The tax code needs simplification to eliminate the deductions that are misused.
20
@Brian
I'm not sure labour is less important or any less deserving of being "incentivized."
26
Tne GOP is using the Grover Norquist theory of “shrinking the government so we can drown it in the bathtub. “ Witness the tax cut to the 1% which left Trillion dollar deficits. What is wrong with these people in power who do not see the benefit of a cohesive country with good infrastructure ( thathelps their business) etc. etc etc . I dont get it . If we go down they do too! They are not immune to chaos and anarchy!
11
Ordinary taxpayers should be incensed at this. Not only do the rich now get lucrative tax breaks, they don't pay their fare share of taxes as a group. Therefore the Trump administration has cheated us twice. First, but transferring wealth from the middle class to the ultra rich, and second, depriving the nation of income through cheating. How will the shortfall be handled? By cutting social services, of course. The Democratic takeover of the House may be able to curtail this, but the House alone will not be able to stop the rich from cheating. With Trump--the cheater-in-chief--in the White House, there is no incentive for reform.
14
@William O, Beeman 50% of Americans pay less in taxes than they receive in benefits and transfers and another 30% break even. So the country’s tax base is supported by 20% of citizens. Seems like they’re paying more than their fair share.
1
Find the 800M missing from the DOD budget according to their 2018 audit, and despite this they got a 20% increase at least. Take the 5-25B from the Border Wall To Be Used Against Minorities and To Keep America White and Safe, and use it to fund the IRS budget and hire more auditors.
I agree completely with the NYT, we have to safeguard our tax base and get these monies collected, and the audits started.
2
Hopefully, the NY Times will provide more articles to expose which groups (landlords, corporations …) are violating our tax laws and the changes that Congress must implement to allow the IRS to enforce the tax laws.
According to Treasury Inspector General for Tax Administration (TIGTA) report Reference Number 2011-30-005, “at least 53 percent of individual taxpayers with rental real estate activity for Tax Year 2001 misreported their rental real estate activity, resulting in an estimated $12.4 billion of net misreported income.” In 1988, the NY Times reported that Charles Rangel, the chairman of the House Ways and Means Committee, which writes the federal tax code, underreported his rental income.
Since Congress, specifically the House Ways and Means Committee, is aware of the underreporting of rental income by landlords, why has Congress and the IRS not provided a solution for this issue? One easy change would be for Congress to change the law to require tenants to report rental payments for a property. With this additional information, the IRS will be able to verify the rental income for a rental property.
Instead of looking for ways to blame Republicans or Democrats, we must begin to provide solutions.
2
President Trump says those rich people who pay no income taxes are smart. He praises them.
147
@Barb There should be a real AMT for all tax payers who earn more than $500,000 at at least 15-20%.Real estate should be limited to actual losses and not depreciation or paper losses that never actually happen.
23
@Barb
For whom was the huge tax cut, Trump gave?
Naturally, for himself and his family.
35
@Barb
including those who just say they are rich-like him
his $ comes from Russians laundering their cash through his companies
he already squandered what daddy dearest gave him-6 times over
11
Besides deliberately making IRS toothless and partisan (by means like under-funding the agency, corrupting its top officials), IRS is also been forced to turn a blind eye of non-profit organizations, mainly the religious (mainly Christian, Evangelical) and cultural ones.
4
The best Congress money can buy, and well worth every penny!
1
Double the IRS budget and audit every corp each year to squeeze every dollar possible .Aggressively search and seize offshore accounts .Make capital gains taxable at the tax bracket the recipient operates at ! NO deficit spending . Take $125 B away from the Pentagon, our sacred cow that cannot account for 125B . This is NOT rocket science folks .
1
"One area where the I.R.S. still bares its teeth is in auditing people in the lowest tax bracket." As I started to read this article, I said to myself, "I'll bet they go for the low-hanging fruit because it's easier to get poor people to pay up". Yep.
1
Every Trump cabinet appointee was selected to destroy the agency they lead with the intention to hobble the federal government while Trump and his friends grab the spoils of this now questionable election
11
If the press did its job things would not be so corrupt. Between doing nothing about voting and tax collection our press has allowed the corruption it loves to present in op-ed. The front pages, forget about it.
As soon tax season is over we won't hear a peep. Likewise for our elections, then after the next one we will hear all the same serious complaints soon to be forgotten.
If Mueller wasn't investigating now one would know and the IRS wouldn't care about all the tax cheating and money laundering done by Cohen, Manafort, Gates, etc. etc.
It makes me wonder how many other rich people are still getting away with it!
1
This is the same IRS that selectively went after conservative organizations. Anything that reduces the strength of this "run amok" organization is good. This is what happens when you lose the faith of a large part of the tax paying public. Remember, it is a "volunteer" taxing system.
1
The witch hunt against the IRS was manufactured to declaw the agency for the benefit of the wealthy. Who reaps the reward when the IRS cannot so their job- certainly not average Americans -the fake news is the phony outrage manufactured by fox and friends
Real patriotic Americans would want everyone to pay their fair share so we may all reap the rewards of education, infrastructure and healthcare.
1
According to the CBO (https://www.cbo.gov/publication/53624), in 2017 the federal government spent $4 trillion and collected $3.3 trillion in taxes, for a deficit of $700 billion. 20% of $3.3 trillion is $660 billion, or nearly the entire deficit. I find it hard to conceive of the GOP having good-faith intentions when they push through large tax cuts for the wealthiest along with hamstringing IRS enforcement, all the while claiming the mantle of "fiscal responsibility" as a justification to cut social programs.
I might add that as a senior surgeon with a fair amount in the stock market, the GOP program is probably increasing my wealth, but I still find their policies reprehensible. I'd rather pay higher taxes and live in a more just society.
22
Taxes could be a gift to ourselves, if the government got it's act together. We complain about taxes, but other countries provide through taxes what we pay out of pocket for. Hope the new congress makes some empowering and cheered moves toward infrastructure, health care, child care, long term care advances partially by collecting evaded taxes..
8
One of the complaints about the economic problems in Greece was that they have an ineffective tax collection system. Funny, then, that our Congress actually consciously engineered our tax collection to be ineffective. Oh...wait... I just remembered where our Congress people get the vast majority of their money....
10
In a continuing professional education class for CPA's a few years ago, I heard the instructor query the hundred or so tax professionals in the room whether any of them had had any client undergo an IRS audit during the last year. No hands were raised. The vast majority of audits come from a mismatch of W-2's, 1099's, etc. and much of the wealthy's income does not generate these forms. No wonder the wealthy and their tax advisors take ever more aggressive positions on their tax filings. More auditors would be very helpful and would easily pay for themselves in increased tax revenues.
4
Not noted in this excellent article is the fact that the IRS is not adequately staffed or funded to monitor political giving by outside interest groups. All the way around, it fits the Republican agenda to render the IRS toothless.
10
"Loopholes are beyond the means of most Americans who earn salaries or are paid hourly wages"
First, one man's loophole is another man's legitimate deduction. Many Americans who earn salaries or are paid hourly wages get to deduct the interest they pay on their mortgage. To a renter, that is a loophole, to a homeowner it is a deduction. If you pay tuition for yourself or you children, you can use it as an income adjustment. Loophole or deduction?
Second, as to focus. While I agree that more money per fraud case could come from the rich, there is another thing to consider. The rich can afford tax accountants who can bury income and make it very difficult to find fraud, much less prosecute it. The lower income taxpayers errors/fraud is usually much easier to catch. It may make more sense to fish where the catch is smaller and easy rather than where the catch is bigger but harder.
3
My son, a musician at the time, made around $30K and got audited. He had to explain the $1000 that had showed up in his bank account. It was the Federal Tax Rebate that Americans got as part of the response to the 2008 financial crisis.
A couple of other deposits were transfers from another bank account.
We all scratched our heads at why the IRS would bother when individuals and companies with lots of income would be overlooked.
1
Thanks for pointing out this often neglected aspect of our Federal finances. Whatever the latest tax bill or budget, if we are not collecting the money owed we are strangling ourselves. This is not something to be laid at the feet of the current administration or Congress. This has been going on for many years and I hope it now gets some attention.
1
Your numbers do not add up since much of the income people receive have 1099s or W-2s making things difficult to hide. Having said that, more IRS funding would be a good thing. Their computer technology is outdated and their response time is slow. If you deal with them, they do not have direct dial, so, it is difficult to have continuity if you are working on a problem. They do not use email. If money was appropriated to fix the interface with the public, it would be a good start. I would also support a higher tax rate for incomes over 1 million.
2
Inn spite of the hysterical tone of this so-called "news' article, the situation is decries is a good thing for the country and the economy.
"Enrich wealthy individuals and corporations with tax giveaways that balloon the deficit, justifying spending cuts for health care, education and infrastructure"
Those sound like lofty goals and I congratulate the Republicans if they have managed to achieve them.
As for what that extra money could pay for, how about
More ambassadors to countries where we do not need embassies at all? (Most countries fall into this category)
How about even fancier offices and parties for our politicians?
How about White House state dinners? Maybe if we cut tax receipts far enough we can get taxpayer-financed entertainment costs down to zero, where they belong.
Massive travel budgets for the Executive and Congressional branches?
Entire Departments that we would be better off without?
Cutting tax "revenues" makes the country better off. Every dollar of "revenue" collected by the government is a dollar out of the hands of the private sector. The less of this the better.
1
The IRS is being gutted in another significant way. A major new tax law was passed for 2018 and had to be incorporated into the 2018 forms used by taxpayers to file their returns. It is the IRS job to Implement the new law accurately in the 2018 forms.
The IRS has also redesigned the format of Form 1040, referring to it as a "postcard," and has added a whole bunch of new schedules to make Form 1040 shorter. Trump touted a postcard size Form 1040 during his campaign.
I do not believe that anyone at the IRS, or anyone in their right mind, would choose to implement a major discretionary redesign of tax return forms in the same year that it is necessary to make major revisions to tax forms to accurately reflect changes in tax law.
Is it possible that Trump is not in his right mind?
1
Decades of legislation providing tax loopholes for the rich and well-connected have already rigged the tax system in favor of the rich. On top of that, they cheat.
We are well on our way to becoming Greece.
17
Adequately funding the IRS would be a much more productive use of that $5 billion dollars that Trump wants for his wall.
433
@RunDog
"More than $8 billion in back taxes did not get collected in 2017 because the agency couldn’t get to them before the 10-year statute of limitations ran out."
And there's the $5 billion for the wall, right there.
28
@RunDog
How about a deal between Trump and the Congress;
$5 billion for the wall, and $5 billion for the IRS, with the IRS tasked with getting the most they legally can?
Should reduce the deficit.
15
@Randy Kessler
Good idea, but raise the tax rate on high net worth individuallls (and close the "Carried Interest" loophole) to male sire the Governmnet collects the $10 Million.
3
Let's be perfectly clear about this. When people cheat on their taxes, they don't cheat the government. They cheat the majority of us who do pay our taxes. Simply put, they are criminals! Perhaps it would help of we thought of those who minimize the powers of the IRS, either through word or deed, as criminals, accomplices, or both. And yes, that includes citizens, media, and members of the government too.
39
And most obviously this applies to the Tax-avoider-in-Chief. Can’t wait to see his tax forms. 10 year window takes DJT back to the crash.
Should be interesting!
4
When the IRS was targeting Conservative organizations, where was the Times’ outrage then? And how about kudos for eliminating the SALT deductions on the wealthy? Oh wait, mostly on the coasts.
4
Coastal economic engines you mean.
3
@LTJ I'm sure the Times would have been outraged, if this were actually true.
https://www.nytimes.com/2017/10/05/us/politics/irs-targeting-tea-party-liberals-democrats.html
4
@LTJ. That claim (about the IRS targeting conservative groups) was investigated by the FBI and found to be untrue. Just more Fake News from the party that excels at Fake News. Also, the SALT deductions limits hits many middle class and even lower income people, such as seniors trying to keep their homes in their old age. I guess they should all move in with their kids. That sounds like good family values to me.
4
The IRS being something of a domestic terrorist organisation, gutting it makes the country freer for everyone--at least everyone forced to pay taxes used at least in part to give "free" rides to those who pay nothing.
1
Paying taxes is patriotic and civil societies have a large middle class and a supportive safety net funded by - taxes.
Don’t like taxes? There is always Somalia- check it out and let us know how safe you feel.
9
@Henry Miller - you are referring, of course, to the Trumps and their ilk, the ultimate free riders, right?
3
@Henry Miller
By "those who pay nothing," I assume you mean the millionaires and billionaires who pay no taxes, thanks to their benefactors in Washington. You're paying for their free ride.
3
Lately, America is becoming a country where one's success in almost any field becoming synonymous to his or her ability to exploit the prevailing culture of nepotism, other forms of corruption, and crime (mostly white collar crimes) in top positions in both private and public organizations, as prevalent in most developing countries. Forget most private companies, just look how rampant corruption in recruitment and promotion in even Federal Govt.
One example- " (besides so many corrupt and/or unqualified people from Trump campaign) this year Trump hired truck driver Nick Brusky to act as a Confidential Assistant with the USDA’s Foreign Agricultural Service — an agency that works to “link U.S. agriculture to the world to enhance export opportunities and global food security.”
US is also showing the signs of growing religious and racial fundamentalism and segregation, which is increasingly influencing our public policy. It's another similarity with most third world developing countries.
No wonder, many economists now think that USA has started showing symptoms of a typical 3rd world developing country. https://goo.gl/zJ8avi
10
It is hard to grieve for the IRS, although it is a necessary evil if we want to fund our government honestly. However, since most of our tax is based on automatically reported and computer evaluated forms, there should be less need for lower level auditing. Perhaps increased funding for this agency should be from increased fines and penalties based on the results of auditing the most likely to cheat and the biggest cheaters.
81
@Elwood
If it was as simple as you say, the rich wouldn't hire tax attorneys who create elaborate dodges, and buy politicians to write legislation to make it easier. The US hasn't kept up with tax fraud and money-laundering because it is expensive and time consuming. I agree, it would pay for itself, but that's not what rich campaign donors want.
38
@Elwood If we consider the IRS as a necessary evil. then shouldn't we consider law enforcement and other agencies that try to ensure that we obey our laws necessary evils.
We have an unhelpful opinion of the IRS, which plays into the hands of the Republican Party to undermine the agency's ability to collect all legitimate taxes.
Let us remember that the top tax rates in the 50's and 60's where as high as 92&, and we consider those the good old days for out economy.
40
@Elwood
Wealthy individuals and the Republican Party, which supports the wealthy more than the working people, deliberately teach citizens to think of government programs and employees and unions as "evil", as part of a program to teach people to hate what the very rich don't like, regulation of society for the common good or labor having a voice for justice for workers. Thank for the harm you have caused, Mr. Reagan, Mr. Gingrich, etc. Justice Oliver Holmes is credited with saying "Taxes are what we pay for civilized society …"
Citing another source, "... in 1852 a committee appointed by the governor of Vermont wrote a report for the legislature which included the following:
Taxation is the price which we pay for civilization, for our social, civil and political institutions, for the security of life and property, and without which, we must resort to the law of force."
A small percent of a population can easily be judged as all "good" or "evil". Most of us are can easily reflect on the good and the mistakes we have made. Life and society are way too complicated to easily put people or government agencies into small conceptual boxes.
15
Oh, it's not just the IRS. The FDA, the CDC, the State Department? Looks what's been done to all of them. The entire federal regulatory apparatus has been hollowed out, and is now a Potemkin Village of regulation (and protection)...which sounds great until you go to the grocery store. We can no longer trust that the feds are doing their various jobs. It's worse than clearly not having any regulatory apparatus, because then you know that you have to look out for yourself (don't buy any Chinese milk products, for example). The way it is, they preserve the appearance of regulation only, so you think they are watching things, but they aren't...it would be better to spend a bit more and get actually functioning agencies.
14
This is just like when Trump accuses someone else of the same thing he himself is doing.
The 1% always cry "class warfare!" when in reality they are the ones sticking it to the rest of us.
35
The Republicans have sold their base on the ideas that taxes are "confiscatory," that citizens should be able to keep their money in their own pockets where it will be spent the way they see fit, not the way the "problem" government thinks it should be spent, and that the only way to tax everyone fairly is to tax everyone "flatly," i.e., the rich should pay no higher a percentage of their income in taxes than the poor and middle class. Oh, well.
3
And the beat goes on...
To the extent that Trump is rational, he is running what the military calls a false flag operation. He talks about doing all the things that need to be done for the moderate-income Americans, then gives the store to the wealthy. Like in the movies when the bad guys dress up in American uniforms and try to undermine the good guys in some sneaky way. Or like when a wolf dresses up like a sheep and sneaks into the herd.
But wait. There's more. He's like the weasel that sneaks up on the rabbits by clowning around, performing various antics like jumping up and down, chasing its tail, etc. The curious rabbits watch until he's too close, then he pounces.
Yes folks, Trump is the distraction to keep us from seeing the final step in the transfer of wealth and control from us to our future masters.
Thanks to the Times for showing us some of the machinations behind the curtain. This is one detail in a very large scenario that won't end well for average Americans unless we can find someone to vote for who will actually set it right.
20
This is all part of the Right wing effort/plan to debilitate the government. Those who don’t know or don’t believe this, because they don’t read anything other than right wing publications, are becoming willing dupes and victims in the “government is the enemy” line that was first enunciated by Ronald Reagan. Anyone with common sense can see the disastrous handwriting on the wall as the rich, operating through the Republican Party and an incompetent and untrustworthy but also rigid President, leave the nation with a government shutdown and future humongous debt.
The state governments are thus empowered and dissolution of the federal government in the mind of citizens begins to operate. Everywhere a citizen looks today the fingerprints of the superwealthy are all over the destruction of the federal government. In their hubris they do not realize that even their money cannot protect them when the nation’s laws are flouted because there is no one there to enforce them, as in this case: not enough tax collectors. Just one aspect of our federal connections — now extend this to all those other ties. Perhaps an exaggeration but it doesn’t take much. Trump is not the only one that uses chaos and disorder to impose their own will.
14
Here’s a little New Years wish: Let’s not be the typical empire that destroys itself with it’s own greed, corruption and far flung imperialism. Instead let the 1&2 percenters who have benefitted so much from all this country once had to offer, stick their heads up out of their black holes of greed, come together and lobby for a tax increase so we can have the infrastructure, healthcare and jobsthat will fatten their own bottom lines in the end. They can be the heroic renewers and saviors of our great experiment in democracy and its federal system of government that has been the evolving and ever in need of improving, model of the world.
201
@Maggie
Check out: https://patrioticmillionaires.org/
4
@Maggie
It'll be just like generous Santa coming down the chimney.
@Maggie Well said. Add affordable higher ed to that list of necessary social improvements that the rich should be subsidizing for the 99%.
5
The reduction in the IRS workforce is really not a problem. With the booming Trump economy, the tax revenues just keep rolling in. And now that Lois Lerner is gone, the IRS doesn't need all those employees to investigate those darn tea party patriots.
But hopefully there will still be enough employees to investigate the Clinton Foundation.
2
Yes the IRS should go after big fish but the rich are smart and have good lawyers. The working poor who abuse the earned income tax credit are not too bright and easy to catch. So the IRS goes after the small fish instead.
2
@joe
No, the IRS goes after the small fish because they are ordered to do so. The Service is smart enough to know that the real tax fraud is at the top 1%. But they are smart enough to know that Republican members of Congress will go berserk when their donors complain about having to pay taxes.
2
@joe IRS agents can catch EITC cheaters with a few clicks of a mouse. That's why they go after the small fish. It's easy and it helps the agents meet their quotas for audits.
Thanks NY Times for clearly describing the problem. Democrats should make it a central element of the 2020 campaign. Simply put, the rich are cheating the majority of Americans by underpaying their taxes. Doubling the number of IRS auditors and targeting upper income filers is an efficient use of tax dollars.
18
There is a Deep State, it is on Trump's side, it comprises Republicans, rich people, and especially, rich Republicans.
12
Well documented and all on target. There is a local IRS office near me in Poughkeepsie buried on the 2d floor of some small building. There used to be about 3 or 4 employees. Last time I checked there was one plus the security guard !
3
The article states, "So Congress limited deductions for state and local taxes to $10,000 annually. While that generally applies to well-to-do people who can itemize their tax returns, it was also a clear shot against blue states such as California and New York that have relatively high state and local taxes."
Well, yes, blue, urbanized states tend to have higher state and local taxes. But a greater injustice is caused by the fact that these blue states have far higher real estate prices, where in many cases even a median (or, as in my neighborhood in Arlington, Virginia, when combined with sales and other state taxes, BELOW median) home bumps up against the $10,000 limit.
This is going to be very difficult to correct, given the highly sophisticated, successful, and long-term PR efforts by Republicans to paint taxes somehow as money the government steals from them rather than the price we pay for a civilized, safe, secure society.
As I generally respond to those who argue this way, perhaps they should move to communist nations that do not charge taxes to their citizens.
11
"Although we’d all like to pay less, relative to most developed nations our tax burden is a pretty good deal."
No, it isn't. Whether taxes are a good deal depends on what you get for them. -- people in higher tax nations get health care, for example.
16
It is not entirely the IRS’ fault. The big prestigious accounting firms who cater to the wealthy look the other way when they know there is probably untruthfulness from their client. Trump’s accountant was perfectly capable of sending not so truthful information to whoever files his taxes. Manafort’s prestigious accounting firm in Virginia was more than willing to change the numbers to lower his taxes, just by his merely asking for that to happen. The accountants are in on it too - they should be legally liable for assisting clients - just as lawyers are held accountable for their actions, accounting firms should reap big penalties for representing the tax scofflawas. I’m sure the rich don’t come up with these tactics on their own.
21
The United States does not have a revenue problem, it has a spending problem, plain and simple.
1
@Matt
The revenue problem you speak of is that the wealthy people in this country dodge taxes and get special tax treatment. Why should a working person pay a higher rate in her income than a rich person who plays tennis and goes on cruises to occupy their time? Also, let's stop spending money we don't have on a huge military. Let's start helping people, dealing with climate change, investing in infrastructure and education. Enough already.
70
@Matt
Yes, we waste spending on tax cuts for the rich.
3
@Matt
You're right. We spend money on all the wrong things. Instead of investing in and caring for our people and their futures, we give huge tax breaks to rich people and corporation that don't need them and spend enormous amounts of money on the war machine. Pare back those two things alone and you can afford great education, health care for all, and top notch infrastructure like the rest of the world.
2
A multi-tiered, no deduction tax with a generous exemption to keep low income families from paying taxes and a top bracket of 50% would make a lot of this mess go away.
Let's also tax capital gains the same as earned income, so the wealthy pay their fair share. A motivated group of AP History high school students could create this plan and turn it into an app in an afternoon.
55
I applaude the message of this editorial and would like to see many more like it.
Two books that may add light to how the ultra rich think of taxes (government theft of their hard earned money) are Dark Money by Jane Mayer and Democracy in Chains by Nancy MacLean. The ultra rich are actively working to ensure they get to keep it all and all Americans should be aware of the manipulation of the legislative processes that are taking place and what it will mean for our future.
34
@LMS
Do you think the Trump Thumper base of Trump's supporters will ever be willing to see how this con man fooled them into believing he's looking out for their interests and not for his own wealth and that of the other rich barons in America.
They are unreachable, in spite of the optimistic prediction that they will finally come to their senses, and instead will go to their grave defending Trump because he Made America Great Again.
8
As the pro publica analysis shows, who is benefitting the most from the IRS staff reductions? The 1%. Audits dropped from 8% to 2.5% while the audit rate for the middle class dropped from .81% to .48%. Anyone else notice that the uncollected tax estimate is 3 billion a year and the total is enough to pay for the wall?
10
Or pay for healthcare
3
Most of the wealthiest Congressional Districts has elected Democratic Congressmen. President Obama kept the I.R.S. budget to a minimum. Donald Trump is the only Washington DC politician that has recommended a tax on net wealth. See "The America We Deserve". Nobody loves Wall Street more than Senate Minority Leader Schumer. He supports cheating on immigration law, jobs and taxes. He does nothing about the millions of undocumented.
Fair taxation requires the inverse taxation of wealth and income. Those (generally poorer) taxpayers would be able to pay some tax on their net wealth to reduce taxes on payroll and income. Those (generally wealthy) taxpayers could avoid wealth taxes by paying the highest income tax rates. When the IRS computers keep track of both family wealth and family income it is almost impossible to cheat and not be caught. Forfeiture of undeclared wealth would be a just penalty. Please also understand that the internet markets have made fair valuations of assets to be relatively easy - a factor that made net wealth taxation administratively difficult in the past.
2
In Norway it takes me about 10 minutes to check and submit my tax return. Personal income taxation is 24 % of gross income. but there is also an 8,2 % deducted as my contribution to the National Health insurance, which covers the whole population and any person that takes up legal residence with the intent of staying at least 12 months. I pay my taxes gladly, knowing that I will be taken care of if something should happen to my health, Education was free for me, and will be for my children. My taxes also pays for those that have fallen between the cracks. This does not bother me, as I know the same will be true for me if I should be so unfortunate.
399
@Erland Nettum. Yes, we're jealous, but it should also be noted that Norway is a tiny, wealthy, homogeneous country with an irrelevant military.
Comparing your situation to the world's most powerful, richest nation is perhaps a bit simplistic, no?
9
@Sparky The point is that this could be the situation in the U.S. if there was the will. I lived in Germany and could say something similar. My taxes now that I am back in the U.S. aren't much different just one gets much less for them. With a bloated military, overly costly health care, the need to pay for education, poor infrastructure, lack of public transit, lack of child care, all of which gets paid for one way or another we pay much more for much less here in the U.S. most of the excess cost goes to the wealthy as we pay for everything from our pockets.
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@DRTmunich. I live in NYC, so I know all about paying high taxes and getting nothing in return, and certainly agree about military bloat and a dysfunctional health care system, but it must be admitted it's much more difficult to govern a highly diverse, physically expansive nation of 330 million than a homogeneous, relatively compact nation of 6 million.
If Germany, Norway (and Japan, etc.) shared the burden of defending democracy more equally, perhaps we could shift more spending towards health care, schools and infrastructure. I despise Trump, but he is basically right about that.
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And if the markets don’t rebound by year-end—which they won’t—IRS will experience another significant shortfall due to the fact that for retirees, 2019 RMD’s (required minimum distributions) are based on the value of retirement accounts on 12/31/2018 which will result in a smaller distribution and thus a lower tax.
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According to ProPublica there were only 1.1 million total audits, so 396,000 were of lower bracket returns, and that's of 200 million total returns.
In 2013 the the IRS estimated that at least $13B in EITC claims were bogus. Perhaps the percentage of audits given to this is because they are low-lying fruit requiring little manpower beyond the audit letter, since if the taxpayer doesn't respond the tax credit is just withheld.
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@kwb
Much of the "bogus" claims are due to the inordinate complexity of the EITC. Unlike the rich, the poor cannot employ top accountants and lawyers to determine their tax liability.
Simplify the EITC and many of the "bogus" claims will disappear.
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@Garak The EITC, despite its name, is not a tax credit. It’s a cash transfer to Americans whose income is sufficiently low that they pay no taxes at all. The majority of Americans claiming it file 1040 EZ. Not sure how much more that form can be simplified
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Thank you Editorial Board for an informative article. I'm eager to see many more stories about what is actually going on behind the scenes - what changes are being made - not only policy proposals but what is actually changed in government. It's important for us to know that the wealthy have found yet another way to favor themselves (in this case with IRS funding) and for the rest of America to pay for their greed.
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Adequately funding the IRS, would yield the greatest rate of return for taxpayer dollars invested. The years long effort to shortchange the IRS, is yet another example of a Republican party that places the welfare of their donors far above the welfare of our nation. As long as the GOP (in it's current form) remains politically viable, our once great nation will continue it's downward slide into third world status.
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This is an issue that has been growing for decades. In 1978 my wife and I were living in Germany and had 1975 federal tax return audited. This required a train trip from Kaiserslautern to Frankfurt. In short order we cleared up the auditor's questions and everything was declared in order. I asked the IRS agent what our added tax burden would have been, had our filing contained an error and the amount he gave was less than the cost of our train tickets. When I asked if he felt that was a good use of his time and resources, I was informed that the IRS had been instructed to treat all citizens equally in the audit process and this resulted in my returns being chosen. He would have much rather gone after big tax cheats, but was prevented from doing so. His frustration with the policy was palpable and we rode home feeling sorry for the auditor and angry with our government.
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This decimation of the IRS by the Repubs is so blatant, so egregious, so corrupt. If we had an aware electorate, this massacre of good governance would be reason alone for the Repubs to be routed in contemporary elections.
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This is an excellent analysis that succinctly describes the failure of the government to follow sound economic policy. Thank you.
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I'm retired, and rely on investment income and Social Security to pay expenses. The Trump tax cut took away our deduction for property taxes on our home. So Trump's vaunted tax cut has hurt me, and now I learn that truly wealthy people are cheating on their taxes. I despise any warm-blooded creature that votes for a Republican.
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@Bearded One I don't think you'll have to despise too many people after all, as I am fairly sure all the folks who vote Republican at this point are, in fact, cold-blooded.
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@Bearded One
We are in a similar situation, and not even in one of the high tax states. Our income taxes for 2018 are over $5000 higher than the year before with little change in income. We will probably get divorced as we cannot keep borrowing money to pay these increased taxes. With increases in Medicare premiums and supplemental insurance more than wiping out any COLA’s in income sources, each year finds our net income lower. Divorce after over 50 years of marriage will save us c. $7000 a year. We support higher taxes for expenditures that benefit all the population, especially the neediest. Writing our richest citizens checks for $5000 each year is as far from this objective as one can get.
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@Bearded One My first brush with the Internal Revenue Code took place when I was 8 or 9, when I watched the movie "Giant" back in 1956. There is a scene in the movie where Bick Benedict's friends and relatives are discussing oil depletion allowances. My guess is that many wealthy Texas oil men paid little or no Federal income tax legally even when the maximum stated income rate was over 90%.
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It's time for a Democratic-led Congress and a Democratic president to correct this shameful state of affairs. No government can operate without a fair and equitable tax code and Republican robber barons have bled ours country dry.
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@Christy I don't disagree with anything you wrote, but lets not pretend that Democrats haven't obediently enacted their share of loopholes, too. If we want tax reform, we need campaign finance reform.
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@Terry
"If we want tax reform, we need campaign finance reform."
and how do you get campaign finance reform? By voting for Democrats.
HR-1 under Pelosi will be campaign finance reform and other pro-democracy actions---will it get through a Republican Senate and Republican President?
For example, all Senate Democrats voted for the Disclose Act, which the Republicans blocked.
http://projects.washingtonpost.com/congress/112/senate/2/votes/179/
The Republicans on the Supreme Court imposed Citizens United over the objection of the Democrats on the Court.
It would be an 8/2 Democrat-appointee Court instead of 5/4 Republican (and no Citizens United, for the Court would have been 6/3 Democratic nominees that year) if it weren't for the "there's no difference between Democrats and Republicans" Nader voters in Florida and Stein voters in PA, Wisconsin and Michigan
https://www.washingtonpost.com/opinions/green-party-votes-made-the-difference-in-the-presidential-election/2016/12/05/68899908-ba38-11e6-ae79-bec72d34f8c9_story.html?
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@Christy Just about every administration, Democrat or Republican, has been involved in tinkering with the tax code. Historically, being head of the House Ways and Means Committee put a Congressman in a great position to shake down wealthy people and businesses for campaign contributions. The tax code has been used in the past to tinker with individual and corporate behavior. It is riddled with all sorts of deductions and tax credits. Is it any wonder that so many large companies paid little or no corporate income tax in the days when the stated income tax rate was 35%?
The income tax code is especially punishing for single tax payers. My suggestion is that if you can afford to retire early do so and enjoy your retirement. The IRS can't tax what you didn't earn.
2
"The law locks up the man or woman
Who steals the goose off the common
But leaves the greater villain loose
Who steals the common from the goose."
17th Century Rhyme
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@John Anderson
And geese will still a common lack
Till they go and steal it back.
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The rich know that the 99% are too lazy watching the NFL or Americas Got Talent to care about this. And they are right so let the looting continue.
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@DeeBee And many of the poor and near poor were more interested in supporting politicians who shared their "Family Values". The butcher's bill has now come due.
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It's a classic 1% game.. change the rule.. weaken the enforcement and continue to cheat..
Unless we all knows how to vote for our real rights.. we will become slave like Hunger games very soon...
You don't realize that you're in ditch, if you live all your life in ditch.
- part of 1%.
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Couple of my friends own a small construction company, specializing in renovations and additions. It’s always the wealthy clients who stiff them, sometimes for tens of thousands of dollars, in spite of documented change orders and signed approvals. Sometimes the clients offer 60-75% of the amount owed, knowing that the company would have to pay at least 25% to an attorney to collect anything.
Like trump, low-life cheaters, regardless of how much money they have.
I’m sure the wealthy who hide money overseas, or in the documented Panama discovery, are never punished. Republicans in particular, love to dissolve regulations because they are the biggest thieves.
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@Avatar So true, but tell me. Do your contractor friends anticipate the client's behavior and price the extras with the expectation that they will wind up taking a haircut? Many contractors I have known do that.
But do we want tax collectors to approach taxpayers demanding more than is due in the expectation of eventual compromise ? I don't think so, but opinions probably differ.
5
@OldBoatMan What we want as taxpayers, is a system that isn't rigged to favor the already wealthy. We want a level playing field that is honestly enforced. Period.
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@OldBoatMan * Funny I thought I was alone in this stuff. A client begged me to take a project, I relented, outlined our process and got the team started. The client made the progress paym nets but stiffed me on the last. I paid the team out of the first 3 but I lost out. And I still had to pay taxes. Another rich guy.... yeah, this was before I heard about Trump.
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As is so often case, Fox News provided the shock troops for the weakening of the IRS by running endless stories on the fake Lois Learner “scandal” regarding the “targeting” of conservatives by the IRS. It was all part of the larger Obama-is-a-Tyrant FOX News/conservative media narrative.
The demonization of the IRS made it easier for Trump not to disclose hi tax returns, since he claimed that he was being audited and, rather than see that as something worth digging into, the public’s default position was “another conservative being harassed by the IRS.” Fast forward: The IRS remains understaffed, Trump gets the White House and he and his friends get a tax cut that makes them richer. Why no Democrat has been able to make political,hay of this, I don’t know.
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@Mike Colllins I suspect having Dems gaining oversight authority in the House may start to change that. I hope they go after this hard - one thing Americans tend to respond well to is an argument that we need to make the system fairer to average working folks.
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@Mike Colllins, I think it's because the conventional American view of the IRS is that it's an evil bully. As a result, it's hard for any politician, Democrat or otherwise, to go to bat for the unlovable IRS. Conversely, it's super easy to cut its budget.
As an aside, I love the IRS. Back in the day, when times were tough and I wasn't able to pay my taxes by April 15, its staff were always helpful and worked out a fair payment plan.
14
@Mike Colllins.........its NOT a political party problem alone.........but originates from the institutionalized ,opportunistic,corruption of THE ENTIRE US GOVERNMENT .....controlled by the FINANCIAL POWER of the corporotocracy and military industrial complex....... The Executive ,Judicial,and Legislative branches (more or less) are more beholden to special interests .....instead of the COMMON GOOD of the AMERICAN PEOPLE !
3
And yet, Trump is still described as a populist president.
I get FOX News saying this - it's in their invisible mission statement to try to frame issues on behalf of the wealthy- but it's also said by many supposedly more objective news outlets.
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@Thucydides This is because of what comes out of his mouth. Like Huey Long and others, it is what they said that caused the masses to elect them. They appealed to the common man - BECAUSE OF WHAT THEY SAID. In this light the term"populist" becomes a pejorative term. It is the tool of choice for the con man. Unlike the situation with Huey Long, Trump continuously told hundreds of obvious lies while campaigning, lie that should have told those who voted for him that this man is not for real. Both cases involved manipulations to create a personality cult.
2
It is no longer an exaggeration to claim that the United States is a failed state. At the very best, it is teetering on the edge of failure and in imminent danger of collapse.
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