WILL THE ADDITIONAL $80 BILLION IRS FUNDING LOWER THE TAX GAP?
Steve HayesIn a Senate Finance Committee hearing in October of 2021, then IRS Commissioner Rettig admitted that the U.S. is losing $1 trillion a year in unpaid taxes. Since the total tax receipts for 2021 were $4.05 trillion, this means that $5 trillion should have been collected. That calculates out to an evasion rate of 20%.
Instead of condemning these evaders for the lawbreakers that they are, more and more people are wondering how they can evade taxes themselves.
More and more “employees” are looking for “side hustles” that will allow them to not only supplement their income but also pay less or no taxes on the additional income they receive.
The Ruling Elite and their minions in Congress know that this is a real problem. This is the real reason that the U.S. Treasury and the IRS are proposing to tax the sales of used goods by individuals with the new 1099 K rules. Those rules were supposed to have gone into effect last year, but have been delayed until this year.
The growing evasion also prompted the Ruling Elite to propose new rules that would give the IRS unprecedented access to individuals’ bank and credit card transactions. Fortunately, people saw that proposal for what it was—a gross invasion of privacy, and the Elite and their minions had to back down.
Now they are trying a different approach. The 2022 Inflation Reduction Act contains a provision that increases the budget for the Internal Revenue Service (IRS) by $80 billion over 10 years.
The Biden Administration has promised that this massive expansion of the IRS will not target middle class taxpayers. Instead, it will enhance tax enforcement efforts and eliminate most of the $1 trillion of evasion. That sounds good. Who could possibly object to catching “tax cheats”?
The problem is that people who are evading taxes don’t identify themselves as cheaters on their tax returns. Quite the contrary. They do everything they can to hide their illegal efforts and make their returns appear legitimate. Consequently “enhancing tax enforcement” means that these 87,000 new IRS agents are going to have to look at all tax returns with suspicion.
In order to catch the minority who are actively evading taxes, the IRS is going to have to subject everyone to more intense scrutiny—much of it undeserved. Of course, the big question is whether or not the pain imposed on all Americans by this “enhanced enforcement” will actually accomplish the stated goal of closing the tax gap by significantly reducing evasion. There is good reason to believe that it won’t.
The Peter G. Peterson Foundation released a study entitled WOULD INCREASED FUNDING FOR THE IRS NARROW THE TAX GAP?
Here are some of their findings:
- The increased IRS funding would yield $186 billion in additional revenues over ten years ($186 billion minus the $80 billion additional funding to the IRS for a net recovery to the U.S. Treasury of $106 billion over ten years).
- The IRS is expected to face difficulty hiring experienced revenue agents and this may further reduce the additional taxes collected.
The Ruling Elite and their minions are desperate to keep the income/payroll tax system in place. It gives them control over all of us and can be used as a giant ATM machine. Politicians make a lot of money selling federal income tax favors to special interests.
The Peterson Foundation study shows how ineffectual the new enhanced enforcement will be at reducing the amount of evasion.
Let’s also assume (an unlikely) best case scenario in which the evasion rate remains steady. At $1 trillion a year, that’s $10 trillion over ten years. So, collecting an additional $106 billion over ten years will reduce evasion from $10,000,000,000,000 to $9,894,000,000. Is this worth the pain and suffering that all of us will have to endure as the IRS goes after all of us?
One of the factors that led to the French Revolution was that taxes were only paid by the “common people”. The fact that nobles and the wealthy were not taxed in the 1830’s Germany was one of the primary factors Marx pointed to in writing Das Kapital.
Albert Einstein said, We cannot solve our problems with the same thinking we used when we created them.
Using Einstein’s logic, there is a fantastic way to lower evasion—repeal the income/payroll tax system and enact the FAIRtax!
- Transfers power from the government to the people—we control how much tax we pay by how we spend.
- Eliminates payments by special interests to Congress for exemptions from tax.
- Greatly reduces evasion.
- Provides the prebate which actually increases spendable income for lower income people.
- Makes American-made goods much more competitive on the world market. This will increase global demand for American products and result in more and better American jobs.
We now have the opportunity to force all Members of the House to show where they stand. They can:
- Vote for the present income/payroll tax system or for the FAIRtax.
- Support the corrupt income tax and the IRS or eliminate it. It can’t be any simpler than that.
- Hide the true cost of their government or pass the FAIRtax and show everyone the true cost of government on each retail receipt.
- Support the largest transfer of power from government to the people, the FAIRtax, or not.
Please stand with us and demand that your representative support a much fairer, much simpler and much more efficient way to fund the government—the FAIRtax!
The FAIRtax doesn’t pick winners and losers. Because it taxes spending, not earnings, the FAIRtax lets everyone save for their retirement tax free.
The FAIRtax collects the revenue that the federal government needs to operate but does it in a way that has the least impact on our individual freedom and the least impact on our economic prosperity.
There are no tax returns to file and no records to keep. We pay our federal taxes when we make retail purchases of new goods and services, and there is no need for the IRS. If you sell a used couch or used jet ski online, there is no FAIRtax due on that transaction.
The FAIRtax will allow us to TAKE BACK CONTROL.
The income/payroll tax system is broken and no longer working—we can’t repair it but we can replace it with the FAIRTAX!
Join us and TAKE BACK CONTROL OF OUR COUNTRY AND OUR LIVES—NOT WITH BULLETS BUT WITH THE ELIMINATION OF ONE OF THE BIGGEST THREATS TO OUR LIBERTY AND ECONOMIC PROSPERITY—THE INCOME/PAYROLL TAX.
We all should remember Edmund Burke’s warning that applies to our efforts to TAKE BACK CONTROL,
“Nobody made a greater mistake than he who did nothing because he could do only a little.”
We should also remember this quote from George Orwell's 1984, which, if we do nothing, may foretell your and your children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
WHAT CAN EACH OF US DO?
We can write letters and make calls to our elected representatives and attend Zoom town hall meetings demanding that if they really want to allow Americans to “TAKE BACK CONTROL”, the first step is to eliminate the income/payroll tax system and enact the FAIRTAX!
TAKE BACK CONTROL! Help us PASS THE FAIRTAX!
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
Please go to this link to invest in AFFT and in your and your family’s future.