A significant majority of Americans are convinced that the rich do not pay their fair share of taxes. They are right.There are two big reasons for this. First, most income of the rich is from investments in stocks. That income is taxed at a much lower rate than the earned income rate (which most Americans pay who actually work for their income). This results in the rich paying a much lower tax rate than most of the working people in the country.
That is bad enough, but too many of the rich don't even pay the lower rate. They hire lawyers and accountants to devise schemes to help them to evade paying any taxes at all. And sadly, most of them actually get away with this evading the taxes they owe (and should be paying).
How do they get away with this? The IRS is supposed to audit these people. But thanks to budget cuts (mainly by Republicans in Congress), the IRS enforcement cut has been drastically cut -- from about 50,400 agents in 2010 to about 35,000 agents in 2021.
There are more millionaires and billionaires than ever before in the United States, but less IRS enforcement agents to insure they are paying their taxes. The number of audits on millionaires has dropped about 71% since 2010. This makes it much easier to get away with tax evasion, since the IRS only is able to audit about 2.4% of their tax returns -- much fewer than the over 12% that were being audited in 2011.
When Democrats passed the Inflation Reduction Act last year, they tried to fix this problem. They not only gave the IRS billions to upgrade their technology, but provided the money for 87,000 more employees. Most of those employees would be enforcement agents to audit the returns of suspected tax evaders. It is expected this would result in hundreds of billions of dollars in taxes for the government as those evaders would be forced to pay their fair share.
The Republicans did not like this. They did not want the rich and super-rich to be audited. And on Monday night, they addressed the issue with the first bill passed by the House this year. The bill, passed on a party line vote, would take the money away from the IRS that would be used to hire the new employees.
The Republicans claimed that the increase in enforcement agents has "supercharged" the IRS, and that the IRS would use these new agents to go after workers, the middle class, and small businesses. Of course, that is a lie. The IRS director has said the new agents would only audit the tax returns of suspected cheaters making over $400,000 a year.
The Republicans are just trying to protect the rich tax evaders by scaring ordinary Americans. The truth is they don't care about fairness in taxation. They only care about the rich. They don't want the rich to have to pay their fair share of taxes, and don't care that this forces more of the tax burden on the working and middle classes.
NOTE -- This move by congressional Republicans was also to protect themselves from being audited, since most of them are millionaires.
