Finance Minister Janet Yellen said the “shocking” amount of taxes was not collected by the federal government, and called for further action to take that money from the richest Americans.
“It’s really shocking and disturbing to see estimates that show that the difference between what we collect in taxes on current tax and what we have to collect – if everyone pays for taxes due – is over $ 7 trillion a decade.” , Yelen said in an interview with The Atlantic, published on Tuesday.
She continued: “We are trying to take significant steps to fill this gap.”
Yelen’s remarks underscore the Biden administration’s efforts to raise tax revenue from the richest Americans and multinationals to fund $ 4 trillion in economic review programs. President Joe Biden is also increasingly saying he does not want his plans to swell the federal deficit.
At the heart of Biden’s planned revenue raising is a provision to increase IRS funding for implementation. He also wants to slap investors earning more than $ 1 million with a new capital gains tax increase and raise the highest marginal income tax rate to 39.6% from 37%.
The IRS officially estimates that there is a tax difference of $ 441 billion a year. But Charles Retig, the agency’s commissioner, recently told Congress that their number could actually exceed $ 1 trillion.
A recent study by IRS researchers and researchers found that 1% of the best Americans do not report to the IRS about a quarter of their income. The underestimation of income is almost twice as high for the highest 0.1%, which can lead to billions of uncollected taxes.
The gap between taxes due and taxes paid can only increase if left unchecked, according to the finance ministry. The Treasury estimates that Biden’s proposed $ 80 billion investment in the IRS could bring in an additional $ 700 billion over 10 years.
That’s still hundreds of billions in taxes not collected each year, as Ayelet Sheffey told Insider.
Biden’s funding would increase the performance of the richest. Overall, the number of agents working on sophisticated tax evasion measures has fallen by 35% in the last decade, according to the finance ministry. The IRS budget fell 20 percent, while audits fell 42 percent from 2010 to 2017. According to a White House newsletter, the audit rate fell 80 percent for those making more than $ 1 million a year from 2011 to 2018.
On Tuesday, Yellen suggested
it may need to make a “moderate” increase in interest rates to prevent the economy from overheating if Biden’s plans are adopted. This would increase the cost of federal loans, which fall under the jurisdiction of the Fed rather than the Treasury.