Well, not really. But it is an exciting old interest group. The FRP (fascist Republican Party) has been on the side of tax cheats at least since the early 2000s, but in the early days it was more bipartisan. Now, a split is growing between the FRP and Democratic Party on the issue of letting tax cheats get away with it. The Washington Post writes[1]:
These unpaid taxes — often called the “tax gap” — are predominantly owed by wealthy individuals. The richest 1 percent alone duck an estimated $163 billion in income taxes each year.There are some types of income, however, for which little or no third-party reporting exists. These income categories — including partnership, proprietorship and rental income — accrue disproportionately to high earners. The government has much less ability to tell when these filers are misreporting; as a result, they can more easily get away with cheating.When it comes to ordinary wage and salary income, taxpayers are remarkably forthcoming, with noncompliance averaging only 1 percent; for those more “opaque” income sources, noncompliance is an estimated 55 percent.A more effective response would involve more of that third-party reporting so the IRS has greater visibility into who’s likely fudging their numbers. Then the agency could better target its audit decisions.
More reporting would also deter would-be tax cheats from fudging in the first place, because they’d know they’re more likely to get caught.
This solution is exactly what Democrats have proposed as part of their big budget bill.The reporting proposal is estimated to bring in $200 billion to $250 billion in revenue over the next decade, according to Treasury.
This is revenue that would be collected without having to raise a single tax rate, which you’d think Republicans would applaud. Instead, the GOP, backed by the bank lobby, has fought every version of the reporting policy tooth and nail.
Once again, the priorities of the players are obvious and undeniable. The Democratic Party wants to reduce tax cheating. The FRP want to protect it, presumably because rich people who cheat on their taxes tend to be Republicans. And banks, in their unquenchable lust for profit, want to maintain rich people tax cheating in as much secrecy as possible. That helps them keep those tax felons as rich customers. In none of that is there any apparent concern for the public interest or the rule of law.
This is an example of the inherently anti-democratic and anti-rule of law nature of corruption. Corruption has a lot of raw power and it fights to maintain and grown itself, democracy, the rule of law and the public interest be damned. The is sooo damn much money in corruption, who can resist?
Questions: Of these three forces or power sources, (i) dark free speech, (ii) unwarranted opacity or secrecy, and (iii) corruption, which one feels to you like it is the most dangerous to democracy, the public interest and the rule of law, or are these power sources too intertwined or complex to have a feel for which one is worst and least worst. Or, are none of those three significant threats to democracy, the public interest or the rule of law?
Footnote:
1. The WaPo cites a recent US Treasury document that asserts that the net tax gap (what is owed minus what is paid) amounts to ~$600 billion/year. I believe that is a gross understatement. Two different recent assertions by knowledgeable experts were ~$1 trillion/year and ~1.4 trillion/year. IMO, the annual tax gap is a lot closer to ~$1.2 trillion than the Treasury assertion of ~$600 billion. Regardless of what it is, the tax gap is gigantic and the FRP is fighting tooth and claw to keep it as big as they can. It does that to serve its own interests, i.e., power and wealth above all other concerns and interests.