The richest 1 percent of Americans cheat by a total of $163 billion on their taxes each year, according to the Treasury Department.
“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 Secretary for Economic Policy.
By employing a phalanx of economic experts, the richest Americans avoid their tax obligations by a stunning amount, Sarin wrote Tuesday. The ultra-rich only pay about 72 percent of the taxes they owe, according to the Treasury.
The poorer 50 percent of people only underpay by a combined $35 billion, the Treasury Department found. The department notes that exact data is difficult to obtain for obvious reasons, but argues tax cheating is likely “even more skewed” toward the rich than current data suggests.
The Treasury said the best way to fill the “tax gap” — estimated at $600 billion total — is to increase funding for the IRS and empower the agency to go after rich tax cheats.
“Because these individuals know enforcement authorities lack the resources needed to pursue them, the consequences of their underpayments are viewed as minor, and so voluntary compliance rates tend to be lower,” Sarin wrote.
Story by Joseph Wilkinson, New York Daily News.