The Real IRS Scandal
The lead editorial in Sunday’s New York Times explains what the real scandal is at the Internal Revenue Service, and it has nothing to do with Tea Party groups or Lois Lerner.
No, the real scandal is what Republicans did to cripple the agency when virtually no one was looking. Since the broad Tea Party-driven spending cuts of 2010, the agency’s budget has been cut by 14 percent after inflation is considered, leading to sharply reduced staff, less enforcement of the tax laws and poor taxpayer service.
As the economist Jared Bernstein noted recently in The Washington Post, a weakened I.R.S. enforcement staff will be unable to make a dent in the $385 billion annual gap between what taxpayers owe and what they pay — an unintended tax cut, mostly for the rich, that represents 11 percent of this year’s spending. Middle-class taxpayers who struggle to fill out their 1040s may welcome a diminished threat of an audit, but in fact this reduction is not about them. The I.R.S. audits a far higher percentage of tax returns from people reporting incomes over $200,000 than from those reporting less, because that is where the money is (along with the most profitable cheating).
Audits are down, because it costs money to do them; but more money is made back, as $6 is returned for every dollar it costs. But that doesn’t sit well with the right, which would rather protect those who are the primary targets of audits: rich people. And theyk want further cuts.
…rather than meet their legal responsibilities, House Republicans have proposed cutting I.R.S. funding by yet another $341 million in 2015, to $10.9 billion. (Their bill also would outlaw the agency’s collection of the health law’s individual mandate penalty.)
President Obama’s budget, by contrast, would increase the agency’s spending by $1.2 billion compared with this year’s — not nearly enough, but at least a start in reversing a troubling trend and letting the I.R.S. do its job of collecting the money to pay for essential government services.
fantagor July 6th, 2014 at 3:33 pm
The IRS’s budget has gone down steadily since Bush43 took the helm, and meanwhile the number of returns has gone sharply upward. The IRS’s #1 target, though, remains poor people claiming the earned income credit for raising dependents (children mostly).
bahlers July 6th, 2014 at 6:15 pm
And if I’m not mistaken, a majority of these people are hispanic, most likely undocumented.
mea_mark July 6th, 2014 at 6:55 pm
My guess is you are mistaken. Can you come up with some kind of verifiable, credible source for that claim.
bahlers July 6th, 2014 at 8:24 pm
This is simply my postulation, I have no way of knowing where to look.
Related to my assertion is the $4.2B paid in 2010 to illegals.
mea_mark July 6th, 2014 at 9:04 pm
This appears to be a complicated issue. Looking into it a little though it appears that Hispanics that are targeted may have children that are Citizens even though they are not. Since the children are the beneficiaries should we really be wasting money chasing after what really isn’t that much money and not go after the really big tax cheats where the real money is.
bahlers July 6th, 2014 at 9:09 pm
I have seen many different cites claiming to identify illegals claiming dependents that are not even here. There was one account where one residence had several hundred tax returns associated with it and thousands of dependents. How much credibility these articles have is a shot in the dark, your guess is as good as mine.
mea_mark July 6th, 2014 at 9:15 pm
Flagrant abuse should be investigated but wasting money on trying to prove whether someones children or not are citizens and whether the parents are legal or not sounds like a waste of time and money for the return the government gets.
Red Eye Robot July 6th, 2014 at 3:37 pm
Awwwwwww the poor fascist IRS is getting less money!
Carla Akins July 6th, 2014 at 4:52 pm
No, they getting plenty of poor peoples money – they are just not getting the fair amount of rich people money.
bahlers July 6th, 2014 at 6:14 pm
And what is a “fair” amount, in your opinion? You do realize that the bottom quintile of earners do not pay anything in federal income tax, they actually receive money back from the government (in case you don’t know, this is a subsidy that is paid for by the mean rich people).
Carla Akins July 6th, 2014 at 8:11 pm
but they are scewed on sales tax. I also don’t beieve the rich pay their fair share either – since they can hide their money off-shore
bahlers July 6th, 2014 at 8:20 pm
You still have yet to answer my question. In your opinion, what percentage of federal taxes should the top quintile of earners pay? I am strictly talking about federal taxes, state taxes in a separate issue.
Carla Akins July 6th, 2014 at 8:41 pm
I can’t answer that question because I do not believe in a flat or fair tax system. I believe they should return their fund to the US where it’s treated by the standing rules available now.
bahlers July 6th, 2014 at 8:53 pm
Maybe my question was a little vague. What percentage of federal taxes should the top 20% pay? Say the IRS collects $1M dollars from every tax paying person. So what percentage of that money should be paid by the top 20% of earners? I’m not talking about individuals, as there are way too many variable to account for.
bahlers July 6th, 2014 at 8:56 pm
Also, I am talking about our current system, not a sales tax (fair) or a flat tax system.
mea_mark July 6th, 2014 at 9:08 pm
Why not just keep it simple and use the Buffet rule http://en.wikipedia.org/wiki/Buffett_Rule
bahlers July 6th, 2014 at 9:11 pm
Simple, why even have a plan that only applies to 0.3% of tax payers? Most of these people are already paying that amount on their wages, if not more, but the difference is they make a substantial portion of their income through capital gains. So what we are saying is the rich need to continue to pay more and more, at what end? Why not have everyone pay SOMETHING?
mea_mark July 6th, 2014 at 9:18 pm
The poor spend all their money keeping it in the economy, the rich don’t spend all they make taking it out of the economy shrinking it. That is why we are in the mess we are in today. 30 plus years of extracting wealth from the economy has crippled it.
bahlers July 6th, 2014 at 9:23 pm
And how do you get them to bring it back in the economy?
mea_mark July 7th, 2014 at 8:11 am
bahlers July 8th, 2014 at 1:37 pm
High taxes are the cause of them hiding their money in the first place you idiot.
bahlers July 6th, 2014 at 9:24 pm
I have never been able to get an answer from any liberal on this topic.
mmaynard119 July 8th, 2014 at 1:52 pm
Please answer a basic question, and I’m being serious, why should some dollars be taxed at a different rate than others?
bahlers July 8th, 2014 at 2:40 pm
Because in the case of capital gains they come from different sources. Romney has already paid taxes on his wages or other sources of income. He then is smart enough to get a great return on that money and there is no reason why he should be double taxed on his income.
mmaynard119 July 8th, 2014 at 3:23 pm
Not necessarily, monies gained from a hedge fund owned by an individual have not been taxed yet.
Also, what your what statement can be interpreted is that a dollar earned from derived means should be taxed at a lower rate than a dollar earned through labor.
As far as Willard’s brains, as the former governor of my state, you can’t tax what doesn’t exist. And being a corrupt SOB who has destroyed good businesses for his own gain is well documented.
bahlers July 6th, 2014 at 9:24 pm
Perhaps I should ask a different question. What percent of federal taxes do you thing the top quintile of earners are paying?
mea_mark July 6th, 2014 at 9:36 pm
The top 1% pay 23.5%. http://money.cnn.com/2014/04/04/pf/taxes/top-1-taxes/ It should be at least 30%. People like Romney should never be allowed to pay an effective rate below 15%.
AttilatheBlond July 6th, 2014 at 11:04 pm
And corporations, enjoying huge profits for years, pays less than 10% of the budget costs. Considering most government costs now end up making corporations more profitable, that is a HUGE economic injustice.
How much of the DOD $ goes TO corporations that overcharge? How much of the DOD $ goes to enforce international policies that help corporations while hurting people, here and abroad?
Buffett pointed out he pays a lot smaller percentage than his secretary. The tax laws favor the richest, then the GOP makes it harder for the IRS to even extract the paltry sums due from the Hoarder Class.
Yep, people like Romney should never be allowed to pay the low rates he pays. There’s a reason he would not release 10 years of tax return data when he wanted to be the boss of the 47%.
bahlers July 8th, 2014 at 1:41 pm
So you are saying that Romney and those like him should be doubly taxed at the same rate? If he is smart enough to get 80% of his income through capital gains, more power to him and he deserves to pay 15% on that revenue. He has all the risk, and when the market takes a downturn, he suffers big losses.
mmaynard119 July 6th, 2014 at 9:38 pm
At one time, the national economy was doing really well and the uppermost tax rate was 93%. The trickle-down/austerity economics myth has been disproven multiple times – including bankrupting Italy and Greece and nearly bankrupting the UK. And right now, NY has $800 million dollar budget deficit that it has to resolve after Christie cut taxes for the wealthy.
AttilatheBlond July 6th, 2014 at 10:59 pm
Pssst, I think you mean NJ/Christie, not NY
mmaynard119 July 6th, 2014 at 11:11 pm
thank you. I need to start wearing my glasses when I’m using my computer. I appreciate it.
AttilatheBlond July 6th, 2014 at 11:35 pm
I have some nerve damage to hands and my typing goes haywire often, so I understand completely.
call me Typo Queen! 😉
bahlers July 8th, 2014 at 1:35 pm
You mean the rate right before and during the Great Depression? That sounds like a great idea, send us back into the worst economic times of the country and the world. Idiot
mmaynard119 July 8th, 2014 at 1:49 pm
1. Stock Market Crash of 1929
Many believe erroneously that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression.
2. Bank Failures
Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans. This exacerbated the situation leading to less and less expenditures.
bahlers July 6th, 2014 at 9:15 pm
And poor people can hide their money and wages in cash, so what’s your point?
mea_mark July 6th, 2014 at 9:23 pm
The poor can’t hide away trillions of dollars like the ultra wealthy have. I’ve seen estimates that over 20 trillion dollars have been taken out of the economy world wide.
bahlers July 6th, 2014 at 9:26 pm
But there isn’t really anywhere for the rich to hide their money. The Caimans and Switzerland are not the shelters that they used to be.
AttilatheBlond July 6th, 2014 at 10:58 pm
Very few employers pay in cash. They can’t claim the cost of labor if they do. Most wage earners have payroll taxes taken out of every paycheck. Can’t cheat like wealthy people whose income is primarily capital gains, taxed at lower rate & juggled.
Anybody who doesn’t get the wisdom of investing $1 for audits to get $6 back into the US Treasury is probably more focused on ideology than deficit reduction. Those IRS auditors MAKE money for the country!
bahlers July 8th, 2014 at 1:42 pm
A lot of construction and agriculture employers pay a lot of their employees cash.
Dwendt44 July 7th, 2014 at 1:13 am
That hedge fund manager that made over a Billion dollars and paid no taxes are the ones I’m concerned about; not the working poor that claims his disabled cousin as a dependent.
the tax rate on the top level should be 30-33%. The return of the ‘Alternative Minimum Tax’ would help a good deal.
bahlers July 8th, 2014 at 1:44 pm
He pays no taxes due to Congress making loopholes that apply to them. What they are doing is completely legal.
Dwendt44 July 8th, 2014 at 2:18 pm
It’s not the legalities I’m bothered by. It’s the loophole itself and those that other millionaires and billionaires are privy to that the rest of us don’t qualify for.
The tax codes favor the rich, that’ the problem.
bahlers July 8th, 2014 at 2:43 pm
There are a plethora of tax breaks that the “average” person qualifies for that the “rich” don’t.
mea_mark July 6th, 2014 at 4:54 pm
And unless you make a 7 seven figure income it is going to hurt you.
bahlers July 6th, 2014 at 9:15 pm
How? If there are less employees, there are less people to enforce the current laws we have (so numerous) I now have a much lower chance of being audited :).
mea_mark July 6th, 2014 at 9:26 pm
If the government is not collecting taxes from the very rich that can afford lots of lawyers to cheat and get away with it, then they collect the taxes from those that make less, that can’t afford people to help them cheat.
Red Eye Robot July 6th, 2014 at 11:09 pm
You guys just make things up without thinking. First off, no matter how many times they audit me they can’t collect what I don’t owe. Devoting agents to people who owe no taxes yields ZERO revenue. If you don’t cheat on your taxes nothing will be found. Second, which is a more sensible allocation of assets? allocating 10 agents to audit 10 tax payers who may owe $300 hoping to snag 1 or 2, or allocating 1 agent to audit a tax payer who may owe $3000? the reality is the smaller your income the simpler your return and the less opportunity you have to cheat. if the IRS is short handed the stupid game would be going after the small fish
AttilatheBlond July 7th, 2014 at 12:05 am
::Sigh:: The NET gain for $ spent to audit is still $6 in for every $1 spent auditing. It’s not about the ones who don’t owe more, it’s about the ones who do, and there are so many that it pays off 6 to 1 to audit. So why cut staffing to ‘save money’ when it actually results in less money recovered?
Dwendt44 July 7th, 2014 at 1:05 am
It seems that 6 to 1 figure doesn’t include or apply to those taking the standard deduction unless something smells funny in regards to deductions, etc…
But corporations and the well off often fudge the exemptions, deductions, set asides, deferrals, and so forth. That’s where the money and fraud shows up.
Of course, some millionaires hide funds overseas, so that’s a good place to look for fraud as well.
AttilatheBlond July 6th, 2014 at 10:48 pm
Sorry your math tutor died.
arc99 July 6th, 2014 at 3:49 pm
Another diversion away from the real scandals of this administration by the sycophantic media in the tank for this socialist, Muslim, Kenyan, Indonesian.
The list is endless,
Quick & Angry
you didn’t build that I did
Lois Lerner & Lowe
the Navy Jack
the Navy Jill
spending too much on Christmas decorations
not spending enough on celebrating Christmas
the Kenyan birth certificate
the Hawaiian birth certificate
secret grade school transcripts
secret nursery school transcripts
bringing Bergdahl home
not bringing Bergdahl home
government takeover of Medicare
and of course
This NY Times article is an effort from the Obama Ministry of Information to distract real Americans from these numerous scandals that only Infowars and the Daily Onion have the guts to report. Obama is responsible for 9/11/2012, 9/11/2001, 12/07/1941 and (notwithstanding Tony Blair’s lame apology) 8/24/1814. Obama’s treason will not go unpunished.
Patriots will not be fooled. We remain ever vigilant and will ultimately prevail. Victoria Jackson said so. Ted Nugent confirmed it. So I know it is true.
Obama-haters please feel free to copy the above and distribute through your normal email chains. You’re welcome.
William July 6th, 2014 at 3:55 pm
You forgot Bill Ayers and Reverend Wright. Remember Reverend Wright? Allegedly the president worshipped at the Trinity United Church of Christ in Chicago for decades because after all he’s a Muslim.
M D Reese July 6th, 2014 at 6:57 pm
Thanks for the chuckle. I’ll bet that many of them will. They like their rants fact-free and minty fresh. Well, fact-free anyway…
William July 6th, 2014 at 4:36 pm
Fourteen million dollars, thousands of pages of documents, months of investigations and countless hearings, and so far only one criminal has been confirmed.
Tommy6860 July 6th, 2014 at 5:25 pm
The GOP fix revealed. They certainly lost the 2012 election making the 47% remark, so they turn to insidious congressional hearings that result in defending what funds them. Hell, who needs tax shelters.
bahlers July 6th, 2014 at 6:12 pm
This tax cut that the author mentions is only beneficial to liberal members appointed by this administration.
mea_mark July 6th, 2014 at 6:52 pm
bahlers July 6th, 2014 at 8:18 pm
BS as in it is bs that liberal appointees by Obama have been dodging taxes for years, owing several hundred thousand dollars to the IRS? If that is what you mean by BS then I totally agree.
mmaynard119 July 6th, 2014 at 9:34 pm
Other than Geithner, you have any substantive proof of that allegation?
M D Reese July 6th, 2014 at 6:55 pm
I don’t know how the GOPTP ever got a reputation for being good with money. A $6 return for every $1 invested sounds pretty good to me. Meanwhile, thanks to their golden showers economic policies my savings account is making less than .01%. I’m thinking of just burying it in the basement.
Red Eye Robot July 6th, 2014 at 7:12 pm
$6 dollar return for every $1 “Invested” ? if “invest” about $1.8 Trillion a year in the IRS for the rest of Obama’s term we will have a budget surplus before he leaves office!
Obewon July 9th, 2014 at 5:53 pm
Surprise: Obama likely to leave office with another Democrat Presidential budget surplus! Via Conservative AEI on POTUS Obama more than halving GWB’s record 10/1/08-1/20/09 $1.3 Trillion+ deficits during his first term as promised. http://www.aei-ideas.org/2014/04/surprise-obama-might-just-leave-office-with-budget-surplus/ <-Note the federal outlays surplus/deficit graphs:)
mea_mark July 9th, 2014 at 6:16 pm
Your link is not working.
Obewon July 9th, 2014 at 6:27 pm
Thanks Mark:) http://www.aei-ideas.org/2014/04/surprise-obama-might-just-leave-office-with-budget-surplus/
mea_mark July 9th, 2014 at 6:37 pm
It keeps telling me site is off line. I can get home page to come up, but it is cached version from July 4.
Obewon July 9th, 2014 at 7:10 pm
Wow my page date is “Wednesday, July 9, 2014” via My Google: Obama likely to leave office with a surplus
-My previously saved search seems current & I’m not an AEI regular or member http://www.aei-ideas.org/ AEI’s most current article (for me:) is dated July 9, 2014, 1:31 pm.
mea_mark July 9th, 2014 at 7:23 pm
I just tried again, same thing. Is it time for conspiracy theories?
Obewon July 9th, 2014 at 8:36 pm
Your good part of Texas maybe internet segmented from great Obama news:) I would seriously consider emailing AEI and mentioning our realtime experiment from my NYC Verizon internet supplied location vs your astounding results!
I’m still “in the pipe 5 by 5” on AEI.root link and both of these links displaying: “Wednesday, July 9, 2014 Surprise: Obama might just leave office with a budget surplus James Pethokoukis | April 11, 2014, 2:07 pm” https://www.youtube.com/watch?v=8dXc2W1uWck
bahlers July 6th, 2014 at 8:27 pm
I’m sorry, when did Obama ever pass any of the GOP/TP economic policies? Your poor investments are a result of Obama’s economic policies, which have benefited the rich, the stock market is at a record high, so they are happy I imagine.
M D Reese July 6th, 2014 at 8:52 pm
Yeah right…cause the GOPTP policies are all about the worker and the middle class…what a bunch of hooey.
bahlers July 6th, 2014 at 8:54 pm
I don’t think that any of the Congressman/women/Senators/President have the worker’s best interest at heart, they only care about themselves.
mmaynard119 July 6th, 2014 at 9:32 pm
And what policies are those? The ones that have been proven not to work and were based upon a flawed Excel spreadsheet. Or the ones of the Bush Admin that caused the Great Recession?
mmaynard119 July 6th, 2014 at 9:04 pm
Let’s frame this a little differently. If the IRS had enough resources to do its job adequately, then, if you’re liberal, the increase in tax revenues could pay for food stamps or unemployment benefits. If you’re conservative, it could be used to pay down the national debt. For both sides, it could be used to help house and take care of our wounded warriors. So until this shortfall gets rectified, the argument about not having enough money is a nonstarter.
AnthonyLook July 7th, 2014 at 12:09 am
Translation: Calculated, premeditated—- Republican Sabotage.