The Rich Continue to Not Pay Their Taxes

 David Dayen, The American Prospect

’Cause I’m the Taxman One thing about living in America is that you know that the rich are getting away with something, and the moments of change sometimes come about by finding out what. That could be the outcome of this very interesting paper from some researchers (including Gabriel Zucman), which indicates that the top one percent of households failed to record 21 percent of their income, a missing portion that ranges even higher as you go further up the ladder. This is growing worse because of partnerships, which got even larger tax benefits from the Trump tax cuts.   "How do you think they got so rich," you say. It adds up to about $175 billion in tax savings every year, enough to fully fund the child tax credit increase. Now the only way to get at some of this is through the kind of enforcement that’s going to require reinvestment in the IRS. But just shifting the mix of where the agency devotes its enforcement resources would help. As one of our original Day One Agenda pieces from tax law professor Victor Fleischer noted, audit rates for taxpayers earning over $1 million dropped four-fold between 2015 and 2018. Reinvigorate that and at least some of the tax gap is shrunk. That’s why it’s one of the most impactful things President Biden can do on his own, and part of our executive action tracker. This tax season will prove to be an early test.