It has come at a huge cost to ordinary Americans. In addition to the estimated $ 160 billion annually in tax evasion by the richest Americans, the estimated federal income taxes unpaid this year are $ 600 billion.–and are projected to exceed $ 7.5 trillion over the next decade. 2021 study found that the richest Americans do not report up to 20% of their total income. As this tax evasion skyrocketed, we have seen a concomitant increase in what author Chuck Collins describes as “Wealth defense industry”: The standing army of lawyers, accountants and other service providers dedicated to keeping the ramparts against any audit, any investigation or any effort aimed at maintaining a democratic tax system. Little surprise therefore, that the relocated American assets now spread into the trillions.
There is a clear reason for such a staggering implosion: massive budget cuts. The IRS did not disappear on its own, wasting resources through incompetence or inaction. Rather, it has been slowly strangled by Republicans in Congress, who have devoted their energy over the past 25 years to draining the IRS of resources and support across the country. With the rise of Gingrich-style obstructionism in the mid-1990s, Republicans in Congress have spent decades demonizing the IRS, draining its funding, and airing calls for the agency’s outright abolition. . (See: Ted Cruz’s presidential campaign in 2016.) A preview IRS budget allocations shows a constant march towards oblivion–and the slow suffocation of the only agency responsible for ensuring that wealthy Americans are truly bound, by some semblance of law, to the common good.
The decline of the IRS is part of the larger transformation of America over the past several decades into a source of financial crime, a centerpiece of the broader offshoring world, and the premier jurisdiction providing kleptocratic services to all. those who need it. It is no coincidence that all of these changes happened simultaneously. And increased funding is hardly a panacea; While a muscular taxman can finally start to weigh, white-collar criminals–those who claim to be interested only in “tax minimization”–have entire industries and loopholes to exploit. “Given the depth and duration of the problem, a Manhattan Project-like group of the best minds assembled to critically assess elite financial crime seems in order,” Paul Pelletier wrote in Atlantic.
Still, the Biden administration’s willingness to hang on to increased IRS funding, even as Republicans in Congress continue to target the IRS, is, at the very least, an indicator that it recognizes how vital the agency remains to the civic interests of rule-playing U.S. taxpayers. Whether the increased IRS funding is $ 400 billion or the potentially over $ 1,000 billion As other calculations have estimated, the fact that the administration recognizes the central role of the IRS in stemming the country’s financial imbalance is a welcome signal. Biden may not be FDR–but the fact that he seems eager to see the IRS regain the status it enjoyed under it is a sign that the reasons for optimism have not completely faded.