An issue we never talk about — and don’t want to — is how the federal government collects tax revenue. We have a voluntary tax compliance system in America, and it turns out that there are a lot of folks who cut corners or outright cheat the system when it comes to paying their taxes. This is a big problem. America loses $600 billion dollars a year in unpaid taxes that are owed under the law. $163 billion of those dollars come from the very richest 1% of us. That segment from the richest Americans is more than we spend on housing, homeland security, and the Department of Justice …combined. And the total that we are losing from all that tax cheating is almost as much as we pay for Defense.
But of course the solution it’s not something that most Americans like to think about or find particularly appealing. 52% of Americans have an unfavorable view of the IRS. And let’s face it, no one enjoys the process of paying their taxes or likes to think about ways to give the IRS more teeth. But that is exactly the direction the Democrats have been trying to suggest going in the Build Back Better bill. The mere suggestion has opened up a conversation about why this issue needs more attention and what we can do about it.
Our guest Seth Hanlon is a senior fellow at the Center for American Progress. He has testified before Congress, and his work has been cited in the Financial Times, The New York Times, The Washington Post, The Atlantic, and other publications. He has been featured in CNBC, NPR, C-SPAN and other outlets to discuss tax issues.
