On America’s wealth acquisition super highway, the greed limit may be edging upward with even less highway patrol officers on the beat to catch speeders and greeders – even here in Calaveras County.
One would think that a yearly six-fold payout on a financial investment would be enough to entice any politician, especially one motivated by profits, to increase funding for such a program. But over the last eight years our Republican-controlled Congress has chosen instead to reduce funding for the government agency reaping those returns. Why wouldn’t we want a 600-percent profit on an investment? That’s a good question. Why?
Since the Republicans took over Congress in November of 2010, the IRS has been reined in by budget cuts like a dog on an ever-shortening leash. Since that takeover, funding is down almost a fifth, with similar cuts in total employees and one in four enforcement employees getting the boot, all while the total number of filings has increased. During the same time period, audit rates have dropped 42 percent. The number of patrol cars enforcing the greed limit on our tax highway is down and radar guns are evidently now in shorter supply.
Have you ever taken your foot off the accelerator when that patrol car first appeared on the side of the road off in the distance? They’re there for a reason. And so are IRS audits. They remind people that cheating could be costly, and hopefully compel greater veracity about income sources. If you’re a large corporation – corporations are people now, of course – since 2011 your chance of being audited has dropped by a half. That may help answer our “why” question: why offer up less auditing of large corporations? Examination rates for large corporations were nearly 18 percent in 2012. By 2017 it was less than 8 percent.
Cheating continues less deterred. Agency estimates are that over $400 billion in taxes went unpaid in 2017. In 2012 the IRS made 589 criminal referrals for tax evasion. By 2016 that number was down to 328. The rule of law espoused by many conservative politicians only applies when you budget for it. The number of agents in the criminal investigation division has dropped by a fifth since 2010. Less patrol cars, less flashing lights, less deterrence. More greed, more cheating, greater profits. Why encourage people to do the wrong thing especially when it’s so costly to the government and so corrupting of our moral fiber?
Whereas we working-class blokes leave a paper trail separately reported to the IRS, business owners are often on the honor system. The IRS estimates they neglect to pay upward of $125 billion in taxes every year. That would be enough to wall-off the entire country if we were concerned about foreigners coming in. We don’t seem half as concerned about our money going out. Wealthy Americans have over $1 trillion – that’s trillion with a “t” – of personal assets stashed overseas. We don’t know how much of that is disclosed to the IRS. And to what end? Evidently, the greed limit in the express lanes crossing our oceans to hidey holes in foreign mattresses has increased as well.
Even though pursuit of tax-evasion cases has dropped by a quarter over the past decade, the bad guys sometimes do get caught. Modern day Capones like Michael Cohen and Paul Manafort, who failed to report income from domestic businesses and hid money in foreign locales and shell companies, didn’t get caught until the spotlight on our president bled onto those around him. Tax cheaters beware who you’re chauffeuring around in your limo.
And beware of who you vote for. Congressional Republicans would rather divert the IRS’s focus from tax evasion by the 1-percenters to the poor Americans claiming an Earned Income Tax Credit. Talk about small potatoes versus big enchiladas! Why? Or why not? First, hand the wealthy a huge tax break, and then get the IRS off their backs just in case they’re not completely satisfied. While you’re at it, point the finger at the poor. The pledge says “justice for all,” but that depends on whose interests are defended.
Pacific Gas and Electric Co. lawsuit settlements fell on District 2 last year like snow in the Sierra. This year, the piper will be asking for its cut in taxes on that largesse that showed up in so many bank accounts. The public utility offered no accounting of what portions were taxable or nontaxable income, leaving people to make their own decision about how much they need to pay. I hope people are wearing their seat belts. We’ll have to wait to see how many sirens go off and audit letters arrive in county mailboxes. We’ll see how many flashing lights suddenly appear in the rearview mirrors on our county roads. With less attention on the Cadillacs, we may see more Corollas and Tacomas pulled over for driving too fast and too loose.
Jim Pesout is a retired high school teacher who lives in Mountain Ranch. You can reach him at firstname.lastname@example.org.