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The Perils of Underfunding the IRS

Research & Commentary
May 24, 2016

by Josh Hoxie

Underfunding the IRS helps the very wealthy at the expense of the middle and working class. So why do we do it?

Originally published by US News & World Report.

An excerpt:

If taxes are the price we pay for a civilized society, a new report from the Internal Revenue Service indicates we might not be that civilized.

IRS-buildingAccording to the IRS, an annual $458 billion gap exists between how much taxpayers owe and how much taxpayers actually pay. For context, that’s more than the federal government spends on education, housing, transportation and food assistance – combined.

Of the $458 billion shortfall, just $52 billion will be collected though enforcement and fines, according to the report. That leaves the standing gap around $400 billion – which is about where it’s been for the past decade. Which is to say: We have a structural gap in public revenue collection that we’ve come to accept rather than address.

Now, it would be easy to blame the IRS for this failure to collect all the taxes Americans owe. After all, it’s their job to do just that. But that would miss the mark.

Congress, it turns out, has been systematically underfunding the government’s ability to raise revenue. And that’s exactly what some of its wealthy backers want.

Read the full article at US News & World Report

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