ThinkCivics News
An educated citizenry is a vital requisite
for our survival as a free people.
Join ThinkCivics+
  • Culture & Society
  • Economy
  • Health
  • US News
  • Faith
  • Science & Tech
  • World News
No Result
View All Result
ThinkCivics News
  • Culture & Society
  • Economy
  • Health
  • US News
  • Faith
  • Science & Tech
  • World News
Join ThinkCivics+
No Result
View All Result
ThinkCivics News
Join TC+
Home Economy

Want To Close the Tax Gap? Cut Taxes.

Reason.com by Reason.com
July 15, 2021
in Economy
Reading Time: 3 mins read
0
0
Want To Close the Tax Gap? Cut Taxes.

Every policy wonk will tell you that after you live in Washington long enough, you start seeing the same issues reemerge on a regular basis. Common ones are praise for the magical ability of government spending to help pay for itself during recessions and handwringing over the myth of middle-class stagnation. And when Uncle Sam’s coffers are empty, everyone suddenly remembers the so-called tax gap—the difference between the tax revenues Congress expects versus those it actually collects.

So right on cue, calls to reduce the tax gap are back.

After the COVID-19 spending spree, the U.S. budget deficit is even higher than what we’ve become accustomed to. Meanwhile, President Joe Biden and his band of congressional super-spenders are eager to extend many emergency programs, such as paid leave and child benefits, as well as spend a few trillion more on infrastructure and “stimulus.”

While politicians have no problem charging Uncle Sam’s credit card and leaving the bill for future generations, today’s leaders like collecting rich taxpayers’ money even more. But increasing taxes is hard, so Democrats are turning their attention to the difference between taxes owed and taxes collected. Many politicians consider this a pain-free source of new funding.

According to the Department of the Treasury, the tax gap was $600 billion in 2019, and it projected to roughly 15 percent of taxes owed over the following decade. In 2006, this gap was $450 billion, up from $255 billion in 2001, and around 15 percent of taxes owed. If “closing the tax gap” were indeed an easy way to raise money, this gap would have been closed decades ago.

The traditional argument is that if we just beef up the Internal Revenue Service’s budget—which has remained flat in real terms for years—and grow the ranks of its auditors, we won’t have this problem.

The low-IRS-budget argument overlooks this reality: While the taxpayer services budget of the agency hasn’t grown much, the agency’s welfare-handout budget—including Obamacare subsidies, the Earned Income Tax Credit, and the Child Tax Credit—has exploded from $44 billion in 2000 to roughly $216 billion this year. And these figures don’t include 2021’s $650 billion in COVID-19-related payments.

The bottom line is that money isn’t the issue with the IRS. The problem instead is the lack of focus on its core mission. Don’t forget that while IRS agents aren’t doing as much to take taxpayers’ dollars away as Congress wishes they would, the agency also has an abysmal record serving taxpayers who are simply trying to navigate the tortuous roads leading to tax compliance.

In theory, more money in the IRS budget means more agents to help taxpayers comply or to track down tax evasion. But it likely requires some serious tradeoffs with civil liberties.

How far would you be willing to go to crack down on Uber drivers, cleaning ladies, and individuals operating cash-based businesses—also known as small businesses? We’d better have an answer, because that’s the plan. And in light of the recent IRS data leak to ProPublica or the political harassment of conservative political groups in 2012, how much more power would you give the IRS to access people’s finances?

Even if you think these are risks worth taking, don’t expect much success on the revenue front. As several IRS reports and task forces have revealed, when it comes to closing the tax gap, enforcement is the costliest option and delivers only limited revenue.

In fact, former U.S. Taxpayer Advocate Nina Olson (who headed a government agency that helps people solve problems with the IRS) said in a 2011 Senate testimony that trying to reduce the tax gap by focusing narrowly on enforcement “can lead to reactionary laws, procedures, and enforcement actions that actually reduce overall revenue, particularly if they do not address the reasons for the noncompliance or if they unnecessarily burden or

There is one sure way to reduce the tax gap: Cut taxes until there is less incentive to evade the taxman. That requires our enormous government to become less gluttonous with the people’s resources. It is not a pain-free solution for politicians accustomed to feasting on current and future taxpayers’ dollars, but it would work.

This article was originally published on Reason.com. Read the original article.

Reason.com

Reason is the nation’s leading libertarian magazine. They produce hard-hitting independent journalism on civil liberties, politics, technology, culture, policy, and commerce.

reason.com/
Tags: Budget DeficitCivil libertiescoronavirusGovernment spendingIRSSmall Businesstaxes

Related Posts

Karine Jean-Pierre Throws Hissy Fit at Jeff Bezos for Blasting Bidenomics

Karine Jean-Pierre Throws Hissy Fit at Jeff Bezos for Blasting Bidenomics

July 3, 2022
“It Is Very Serious”: War And Weather Threaten To Send Food Prices Even Higher

“It Is Very Serious”: War And Weather Threaten To Send Food Prices Even Higher

July 1, 2022

Report: Americans’ Retirement Accounts Have Lost Trillions – TRILLIONS – In 2022

June 26, 2022

Last year’s July 4th Tweet From The White House Doesn’t Age Well About Biden’s Policies

June 23, 2022
Load More
Next Post
Democrats’ $3.5 Trillion Fully-Paid-for Spending Plan Probably Won’t Be Fully Paid for

Democrats' $3.5 Trillion Fully-Paid-for Spending Plan Probably Won't Be Fully Paid for

New Evidence Suggests Vote Fraud in Fulton County

New Evidence Suggests Vote Fraud in Fulton County

Biden Has Kickstarted A Consolidation Wave In The U.S. Shale Patch

Biden Has Kickstarted A Consolidation Wave In The U.S. Shale Patch

TODAY'S TOP STORIES

  • Watch As Angry Man Confronts Climate Activist For Blocking The Road

    Watch As Angry Man Confronts Climate Activist For Blocking The Road

    0 shares
    Share 0 Tweet 0
  • Viral video shows Portland man lashing out at liberal white woman over traffic incident

    0 shares
    Share 0 Tweet 0
  • Loudoun County Superintendent Accidentally Says the Quiet Part About “Indoctrination” Aloud

    0 shares
    Share 0 Tweet 0
  • DeSantis Fires Back After Gavin Newsom’s Pathetic Anti-Florida Ad Is Revealed

    0 shares
    Share 0 Tweet 0
  • Protesters block, attack truck and horse trailer, driver runs them over

    0 shares
    Share 0 Tweet 0

‘Zero Trust in Our Government’: Spouse of WNBA Player Jailed in Russia Blasts Biden Administration

by ThinkCivics Newswire
June 22, 2022
0
‘Zero Trust in Our Government’: Spouse of WNBA Player Jailed in Russia Blasts Biden Administration
National Security

Joe Biden's ineptitude knows no bounds. As Obama famously said, "Don't underestimate Joe's ability to f*ck things up." So it's...

Read more

State Dept ‘racial equity’ czar said white colleagues too ‘protective of US, lack ‘humility, empathy’

by ThinkCivics Newswire
June 21, 2022
0
State Dept ‘racial equity’ czar said white colleagues too ‘protective of US, lack ‘humility, empathy’
National Security

A 2020 podcast episode with Desirée Cormier Smith resurfaced after the U.S. State Department appointed her on Friday to serve...

Read more

More countries looking at nuclear weapons programs because of Russia

by Hot Air
June 21, 2022
0
More countries looking at nuclear weapons programs because of Russia
National Security

Over the past year, we have seen multiple nations including the United States conducting tests of their nuclear-capable weapons delivery...

Read more

22 Democrats who voted against extra security for SCOTUS justices approved it for themselves after Jan 6

by ThinkCivics Newswire
June 15, 2022
0
22 Democrats who voted against extra security for SCOTUS justices approved it for themselves after Jan 6
National Security

Ahead of the highly anticipated decision that could overturn Roe v Wade, the House passed a bill on Tuesday to...

Read more
Karine Jean-Pierre Throws Hissy Fit at Jeff Bezos for Blasting Bidenomics
Economy

Karine Jean-Pierre Throws Hissy Fit at Jeff Bezos for Blasting Bidenomics

by RedState
July 3, 2022
0

Welp, this one started out bad — and quickly swirled down the White House personal-attack toilet. Zillionaire Amazon founder and...

Read more
“It Is Very Serious”: War And Weather Threaten To Send Food Prices Even Higher
Economy

“It Is Very Serious”: War And Weather Threaten To Send Food Prices Even Higher

by Zero Hedge
July 1, 2022
0

US agriculture executives are warning that war and extreme weather have put global food supplies in danger as skyrocketing food...

Read more
Report: Americans’ Retirement Accounts Have Lost Trillions – TRILLIONS – In 2022
Economy

Report: Americans’ Retirement Accounts Have Lost Trillions – TRILLIONS – In 2022

by The Political Insider
June 26, 2022
0

As if day-to-day living expenses weren’t depressing enough, a quick peek at your 401(k) statements might prove to be too...

Read more
Last year’s July 4th Tweet From The White House Doesn’t Age Well About Biden’s Policies
Economy

Last year’s July 4th Tweet From The White House Doesn’t Age Well About Biden’s Policies

by ThinkCivics News Staff
June 23, 2022
0

Last year, the White House tweeted one of the most famous tweets of all time. Prices for gas and groceries...

Read more
Facebook Twitter RSS

Brilliantly

SAFE!

thinkcivics.com

Content & Links

Verified by Sur.ly

2022

Recent News

  • The 2024 GOP Ticket That Will Win in Key Swing States
  • Karine Jean-Pierre Throws Hissy Fit at Jeff Bezos for Blasting Bidenomics
  • DeSantis Fires Back After Gavin Newsom’s Pathetic Anti-Florida Ad Is Revealed

Category

  • Culture & Society
  • Economy
  • Editorials
  • Education
  • Elections
  • Energy
  • Environment
  • Faith
  • Health
  • Immigration
  • Military
  • National Security
  • Politics
  • Science & Tech
  • US News
  • Videos
  • World News

© 2022 ThinkCivics Media. All Rights Reserved.

  • Login
  • Sign Up
  • Cart
No Result
View All Result
  • Home
  • About
  • Store
  • Contact Us
  • Join
  • Contribute

© 2022 ThinkCivics Media. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

OR

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.