The U.S. loses roughly $163 billion each year in taxes owed and unpaid by the richest Americans, the Treasury Department estimated in a Wednesday blog post defending President BidenJoe BidenBiden to meet House Dems before Europe trip: report 21 House Democrats call for removing IRS bank reporting proposal from spending bill Overnight Health Care — Presented by Altria — Vulnerable House Dems push drug pricing plan MORE’s tax plan.
In a post calling for stronger enforcement of tax laws, the department calculated that the top 1 percent of Americans by annual income are responsible for roughly 28 percent of all lost tax revenue.
“Today’s tax code contains two sets of rules: one for regular wage and salary workers who report virtually all the income they earn; and another for wealthy taxpayers, who are often able to avoid a large share of the taxes they owe,” wrote Natasha Sarin, deputy assistant Treasury secretary for economic policy.
Biden has proposed spending hundreds of billions of dollars to boost tax enforcement and close the “tax gap,” the gulf between the amount of money owed to the federal government in taxes and how much of that the IRS is actually able to collect. The Treasury Department estimated that the gap between paid and owed taxes was about $600 billion in 2019, and IRS Commissioner Charles Rettig has suggested that it could be as high as $1 trillion annually.
Like Biden, Democratic lawmakers have pushed for years to boost IRS funding, hire more revenue officers, and upgrade the agency’s technology. But Republicans, who slashed IRS funding during the Obama administration, have resisted those efforts over fears the agency would target political opponents.
“Giving the IRS the information and resources that it needs will generate substantial revenue. But even more importantly, these reforms will create a more equitable, efficient tax system,” Sarin wrote.
Along with boosting IRS enforcement efforts, Biden has also proposed raising income taxes for high-earning individuals and businesses, establishing minimum taxes for corporations, and boosting inheritance taxes.