The American capitalist class is up in arms. They are cheating one another.
Treasury Secretary Janet Yellen said on Tuesday that the government has missed out on $7 trillion in uncollected taxes over a decade.
“It’s really shocking and distressing to see estimates suggesting that the gap between what we’re collecting in taxes on current tax and what we should be collecting; if everybody were paying for taxes that are due, that amounts to over $7 trillion over a decade,” Yellen said.
Yellen’s comments roughly line up with other analyses of tax data. Studies have shown that rich and corporate tax evaders have hoarded a large share of the uncollected taxes, using sophisticated and complex techniques to hide their assets from the IRS. Analyses have shown that the top 1 percent of taxpayers avoid paying taxes on at least 21 percent of their income, according to IRS data.
Head of the IRS Chris Rettig recently told the Senate Finance Committee that the U.S. misses out on as much as $1 trillion a year because of those who cheat on their taxes.
Another analysis from March of 2019 data found that high-income earners making more than $1.5 million a year paid taxes on only 39 percent of their taxable income on average. The IRS collects less than 50 percent of the tax debt owed by high-income earners, the report found.
In all, the tax avoidance by the top 1 percent of earners — the vast majority of whom avoid being audited — could amount to over $5 trillion over a decade, according to a 2019 study co-authored by Lawrence Summers, former treasury secretary.
Corporations hide their profits in offshore accounts and use abundant loopholes which sometimes allow them to dodge paying federal income taxes entirely. Under Trump, corporations were given more freedom to earn profits abroad and stash the money overseas, making an already lax enforcement system for corporations even worse. Large corporations like Amazon, Nike and FedEx have been able to avoid paying federal income taxes completely by exploiting loopholes in the tax code.