Both Republican and Democrat politicians are coming together out of shared concern over the expanding gap between taxes owed and taxes paid in the United States.
While they may share next to nothing in common on sociopolitical issues, most government officials whose positions are funded by taxpayer dollars can agree that ensuring money exists for their future paychecks and political agendas is an urgent concern.
IRS Commissioner Charles Rettig warned the Senate Finance Committee Tuesday that the U.S. government is losing about $1 trillion dollars in unpaid taxes on an annual basis, Reuters reported.
Blaming several years of budget cuts to the IRS that left it with nearly 20,000 fewer tax collector staffers than it had ten years ago, Rettig said it, “would not be outlandish, that the actual tax gap could approach, and possibly exceed $1 trillion,” every year.
This massive tax gap is caused by a variety of factors, including underreported income, nonpayment of taxes owed, or exaggeration of tax breaks.
To fill this gap, the commissioner suggested Congress guarantee the IRS more “consistent, timely, adequate and multiyear funding” to go after people who cheat the system for tax avoidance. Spoken like a true bureaucrat, Rettig suggested there is an IRS debt crisis in order to make the case for why his agency needs more money.
However, Biden’s 2022 fiscal budget request would boost the IRS’ budget by $1.3 billion which is more than 10% above current levels, according to Reuters. The proposed total $13.2 billion IRS budget would add nearly $1 billion dollars for tax collecting efforts starting this fall.
Yes, the Biden Administration is allocating an additional one billion taxpayer dollars to aid a tax-collection agency in their quest to collect more taxpayer dollars.
While all who owe taxes should be held accountable for paying them, perhaps there’s a reason why the tax gap has drastically increased over the years. Maybe it has something to do with the fact that Americans are vastly overtaxed between their state and federal governments. Taxes are so outrageously unaffordable in Democrat strongholds like California and New York that people are fleeing at astounding rates to free states like Florida that have zero state income tax.
Now in particular, the tax gap is likely worsened by the fact that our economy was decimated last year amid government-imposed lockdowns forcing people out of work, business, and schools.
The IRS commissioner’s timing to ramp up tax collection efforts couldn’t be worse as some parts of the country haven’t even begun to resume life as normal. For example, California businesses aren’t even allowed to open until June 15 at the earliest—if Governor Newsom keeps his word, that is.
Furthermore, consumer prices rose in March for the fourth straight month since Biden took office, causing inflation to hit the highest level in two and a half years, MarketWatch reported.
The rate of inflation over the past year skyrocketed to 2.6% from 1.7% last month. The outlet said the yearly rate of inflation is only expected to increase in the coming months.
In addition to the inflation problem, the national average price for gas surged to the highest prices the country has seen since 2019 because of Biden’s anti-fracking energy policy. As of the last week of March, the average gas price was $2.87 per gallon, according to AAA.
Not to mention, the United States is still eight million jobs away from returning to pre-pandemic levels. This means companies do not have enough capital or demand to hire back the staff they had before the lockdowns, leaving many Americans jobless.
Yet this is the time the IRS has chosen to crack down on nonpayment of taxes, and the federal government is obliging their request for more funding.
Once again, Americans are left out of the equation as they suffer the consequences of decisions made by government officials who have no interest in helping them recover from state-forced lockdowns. Rather they are more interested in forcing tax compliance among people experiencing financial hardship by no fault of their own.