Shrinking the Tax Gap

On July 14, I participated in an online briefing with former IRS Commissioners Fred Goldberg Jr. and Charles Rossotti on modernizing the IRS and shrinking the tax gap.

Goldberg was appointed as IRS Commissioner by President George H.W. Bush in 1989 and served three years. Rossotti was named IRS Commissioner in 1997 by President Bill Clinton. He served five years. Both former IRS commissioners are members of the group Shrink the Tax Gap, which states each year there is a tax gap of $574 billion in taxes that are owed to the IRS but not paid. Their position is simple and clear. Most people pay their taxes. Some people don’t, and that’s not fair.

In an article by James Q. Lynch, Congresswoman Ashley Hinson (IA-01), a member of the House Appropriations Committee, said of bills the committee was marking up, “I think that these bills disrespect taxpayers.”

What if we collected taxes due the IRS to help pay for them? Would that respect taxpayers?

Hinson supports expanding the child tax credit in the American Rescue Plan, but has concerns about the price tag of the bill that includes sending payments averaging $423 a month to about 35 million families with children. Hinson, like every Republican member of Congress, voted against the American Rescue Plan. When we are talking about price tags, the elephant in the room is the hundreds of billions of dollars in unpaid taxes created by the tax gap.

President Joe Biden proposed spending more money on the IRS so it could pursue tax deadbeats. We’re talking about people who have unpaid tax bills, not creating new taxes. Republican U.S. Senators want no part of this.

“What Republican senators object to here is training IRS investigators on people and corporations who are deliberately trying to cheat the system (not to mention the American people) and have the resources to do so,” wrote Kerry Eleveld at Daily Kos. “Instead, (they) would clearly rather just keep the IRS focused on smaller fish, who may have messed up some calculation on TurboTax, for instance. Why? Because the small fries aren’t delivering enough to GOP campaign coffers, that’s why.”

Paying taxes is so basic to being an American I believe most voters would support collecting taxes due. Yet that’s not how our government is evolving. The Republican minority seeks to retain control over the tax system to benefit the minority of wealthy Americans.

In Sunday news, Senator Rob Portman (R-OH) announced Biden’s plan to fund the IRS is officially off the table in the bipartisan infrastructure bill because he got “pushback” from fellow Republican lawmakers who dislike the idea of giving the IRS the tools it needs to collect taxes owed. Portman is a key negotiator for Republicans on this bill. It will be up to Democrats to pass this provision through reconciliation in the separate $3.5 Trillion infrastructure bill to which their caucus has agreed.

Do your job Congress. Shrink the tax gap.

For more information about Shrink the Tax Gap, click here.

~ Written for Blog for Iowa