The 1 Percent Are Cheating Us Out of a Quarter-Trillion Dollars in Taxes Every Year

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The next time you hear conservative politicians insist they want “law and order,” hate “looting,” and believe America can’t afford new government programs, show them two landmark reports that emerged in the last twenty-four hours. The data in those analyses tell the story of conservative politicians letting billionaires and corporations brazenly evade laws and effectively loot hundreds of billions of dollars from the public treasury — all while those same politicians plead poverty to justify cutting the social safety net during a lethal pandemic. The first report came from the nonpartisan Congressional Budget Office (CBO), which found that between 2011 and 2013, $381 billion in taxes went unpaid every single year. Couple that data with recent Harvard University research showing that the top 1 percent of income earners are responsible for 70 percent of the tax gap, and you see the full picture: The wealthiest sliver of the population is depriving the American public of about $266 billion of owed tax revenue every year. That tax gap didn’t just magically happen — it is the result of conservatives’ huge cuts to the Internal Revenue Service’s enforcement budget, which resulted in a particularly precipitous decline in audit rates for the superrich. In fact, the $266 billion figure could be an understatement, because the congressional budget analysts were estimating the tax gap that existed before those IRS budget cuts. “With the money that these tax cheats owe, this year alone, we could fund tuition-free college for all, eliminate child hunger, ensure clean drinking water for every American household, build half a million affordable housing units, provide masks to all, produce the protective gear and medical supplies our health workers need to combat this pandemic, and fully fund the U.S. Postal Service,” said Senator Bernie Sanders, who requested the CBO study. “That is an absolute outrage, and this report should make us take a long, hard look at what our national priorities are all about.”

“Shifting Over $1 Trillion in Profits Every Year to Corporate Tax Havens” Just after the congressional report was released, the Tax Justice Network released a separate study showing that newly released international data prove “that instead of declaring profits in the countries where they were generated, multinational firms operating around the world are shifting over $1 trillion in profits every year to corporate tax havens” — moves that deprive governments of $330 billion in tax revenue that is owed but that is not being paid. The study noted that just four small countries — the UK, Netherlands, Switzerland, and Luxembourg — “are together responsible for half of the world’s corporate tax avoidance.” The United States alone is losing about $60 billion of revenue a year because of these corporate tax evasion schemes, according to Reed College economist Kimberly Clausing. In case you thought the tax haven shenanigans were just limited to corporations, jog your memory and recall the Panama Papers and Credit Suisse scandals that spotlighted how wealthy individuals have gotten in on the offshore schemes.