House, Senate Panels Plan Hearings on Wealthy Tax Cheats
Millionaires owe the IRS more than $2.4 billion in unpaid taxes, according to a recent report from a Treasury watchdog.
House Ways and Means Committee Chairman Richard Neal, D-Mass., said late Tuesday that he plans to hold a hearing to discuss recent research finding high levels of tax evasion among the wealthiest Americans.
“For far too long in our country, the wealthy have not paid their fair share of taxes” Neal said in a statement. “The result is a two-tier tax system where billionaires and big business follow one set of rules, and regular Americans are held to another.”
Meanwhile, on Thursday, the Senate Budget Committee will hold a hearing titled “Ending a Rigged Tax Code: The Need to Make the Wealthiest People and Largest Corporations Pay their Fair Share of Taxes.”
Examining IRS tax compliance data, researchers estimate that the agency will fail to collect $600 billion in taxes this year alone, and an estimated $7.5 trillion over the next decade. Most of this gap is attributable to high earners, the researchers found.
Neal released the statement along with Reps. Mike Thompson, D-Calif., chairman of the Select Revenue Measures Subcommittee, and Bill Pascrell, D-N.J., chairman of the Oversight Subcommittee.
“Closing the tax gap has long been a priority of the Committee,” Neal stated.
Tax Evasion Research
A working paper released Monday by the National Bureau of Economic Research examined tax evasion at the top of the U.S. income distribution using IRS micro-data from random audits, targeted enforcement activities, and operational audits.
Drawing on this “unique combination of data, we demonstrate empirically that random audits underestimate tax evasion at the top of the income distribution,” the authors wrote.
Meanwhile, a just-released study by the Treasury Inspector General for Tax Administration found that millionaires owe the IRS more than $2.4 billion in unpaid taxes.