Dismantling the IRS Only Helps Billionaire Tax Dodgers
Their biggest
cuts appear to be in the Large Business and International division, which
audits wealthy individuals and companies with more than $10 million in assets.
These are essentially the workers that make sure billionaires and corporations
pay their taxes.
Musk and Trump claim to be sage businessmen, but it would be
hard to find a business owner in America that would dismantle their accounts
receivable department when their wealthiest clients still owe them money.
So make no mistake: These
cuts will cost taxpayers a lot more than they save.
Gutting the IRS will hurt the middle class by reducing the
taxes billionaires and corporations pay for our public services. It passes the
bill to working class taxpayers to cover veteran’s services, infrastructure,
national parks, and defense.
When it comes to taxes, the wealthy aren’t like you or me.
Most wage earners have our state and federal taxes withheld from our monthly
paychecks. Ninety
percent of taxpayers use the simple standard deduction filing and hope
we get a refund.
But billionaires and multimillionaires are different. Their
income comes mostly from investments and assets — which they can hide. They
hire experts from the “wealth defense industry” — an armada of tax lawyers,
accountants, and wealth managers — to minimize their taxes and maximize
inheritances for their fortunate children.
They deploy anonymous shell companies, complex trusts, and bank accounts in tax havens like Bermuda, Cayman Islands, and South Dakota to aid their clients in minimizing taxes — tools not available to ordinary taxpayers. According to the Tax Justice Network, over $21 trillion is now hidden in tax havens like these.
A 2021 expose
by ProPublica found that more than half of the 100 wealthiest U.S.
billionaires use a complex trust system to avoid estate taxes, which at the
current level only kicks in for people with wealth over $13.99 million.
This aggressive tax dodging by the superrich has resulted in
an enormous “tax gap” between what they owe and what’s collected. For the last
few years, this gap is estimated
at $700 billion a year — almost the size of the Pentagon budget.
Working and middle class taxpayers will pick up the slack,
or see their services cut. Most likely some of this gap will be added to the
$36 trillion national debt, requiring us to pay on an installment plan.
In previous decades, the IRS had the expertise to keep up
with the schemes that billionaires and transnational corporations use to dodge
their taxes. But over the last two decades, their capacity to catch wealthy
crooks and grifters has been decimated by cuts.
Things started to turn around again in 2021, when Congress
voted to invest in enforcement. And already, the investment was starting to pay
off. A year ago, the
IRS announced they’d recovered $482 million from millionaires who
hadn’t paid their debts.
Trump and Musk are now reversing these modest gains.
As the agency people love to hate, the IRS was an easy
target for Trump’s anti-government attacks. But the real beneficiaries of a
weak IRS are billionaires and large global corporations. With an understaffed
IRS, their tax shell games can operate without scrutiny — something seven
previous IRS commissioners from both parties recently
spoke out against.
We may not agree about everything in the federal budget, but
most people agree the wealthy should pay their fair share of whatever expenses
we share. And it’s hard to catch the criminals if you remove all the cops on
the beat.
The billionaires will be popping their champagne bottles.
Even with the higher tariffs on European bubbly, they can afford the best.
Chuck
Collins directs the Program on Inequality and the Common Good and
co-edits Inequality.org at the Institute for Policy Studies. He’s the author
of The Wealth Hoarders:
How Billionaires Pay Millions to Hide Trillions. This op-ed was distributed
by OtherWords.org.
