5 ms·

While that would be a big boon, it's surprising that number isn't bigger. It seems we're regularly spending that as a sub portion of new bills, and accumulating

While that would be a big boon, it's surprising that number isn't bigger. It seems we're regularly spending that as a sub portion of new bills, and accumulating multi-trillion dollar debts is happening regularly. So even if you could capture it, the US is still spending quite a bit compared to income. I also find the headline seeming to contradict what it says later: "Sarin said that tax gap – “the difference between taxes that are owed and collected” – amounted to “around $600bn annually and will mean approximately $7tn of lost tax revenue over the next decade.”" Not sure how we got from 600B to 160B. Also, isn't that closer to 6TN versus 7TN over a decade? Lastly, whatever these numbers are, I'm sure it in reality could be far, far larger if there weren't so many loopholes, strategies of long-term gains and loans, etc. I happen to have a friend that's ultra ultra rich, and he already has said Forbes estimate is completely off (way underestimated) and they have no idea what his real net worth is (as it's private companies and not public). Goldman & Credit Suisse have a much better idea of the true value here...

newbamboo 5y ago
That was my gut reaction. 160bn is nothing to sneeze at but compared to a nearly 3 trillion deficit, it’s clear that taxing the rich (more) wouldn’t get us very far. Not that we shouldn’t try mind you, but I had imagined this would be a bigger figure.
- Railsify 5y ago
  They don't want to get us anywhere. They want to eliminate any large differences in wealth and try to make everyone equally poor and dependent on governments.
  - quantified 5y ago
    I doubt very much that the top 1% have that in mind.
- jdlshore 5y ago
  That doesn't follow. If this is about tax evasion (according to other commenters; I haven't read the article), then it doesn't say anything about what could be gained by increasing the tax rate.
  - WarOnPrivacy 5y ago
    Post WWII US had a 90% top marginal tax rate and a historic economy. By the time Jimmy Carter was president, the tax rate had been slashed by a third and his economy kind of sucked.
    - ch4s3 5y ago
      1. Almost no now paid that rate, tax deductions and clever strategies existed then too. 2. That captured about 20% of GDP in revenue, and we’ve never captured a larger percent for more than about a single year. 3. We currently capture north of 17% of GDP, which is the post war average.
  - Applejinx 5y ago
    Exactly. This is not about taxing the rich more. It's about stopping them from committing crimes/fraud/etc in the system we've already got.
    - jokethrowaway 5y ago
      Given they need to hire agents to "decipher" their returns it probably means they're using legal loopholes and hiding the money outside of the US with complicated structures. Sure, they could start saying those loopholes are not good enough but then the political system would have a 600bn pressure to implement different loopholes or risk losing all of the tax revenue with people moving somewhere else. These days the USA main advantage is offering highly paid jobs and venture capital - and the ultra rich definitely don't need that. If they're still in the States and pay little tax, they most likely own the system.
      - kelnos 5y ago
- quantified 5y ago
  Are you saying “meh, not enough to worry about”? Any 160bn expenditure is, therefore that quantity of revenue is. The debt and deficit are so large that nothing is a large percentage, just like no one contributes significantly to climate change and Amazon is only 4-5% of retail sales.
- kelnos 5y ago
  Taxing the rich more is orthogonal. You can add higher tax brackets all you want, and it'll bring in more revenue. $600B (or the $160B piece owed by the top 1%) is just the gap between what everyone should be paying based on current tax rates, and what they actually are paying. If you increase the "should be paying" by, say, $1T by increasing taxes, that says nothing about what will happen to the rate of tax evasion. Sure, that $600B figure may go up, but so will overall tax revenues. And if this effort to crack down on tax evasion works, all the better.
dlp211 5y ago
> Not sure how we got from 600B to 160B. Also, isn't that closer to 6TN versus 7TN over a decade? They probably are using nominal dollars and the gaps per year are expected to increase at a rate similar to, or greater than, collected revenue.
vmception 5y ago
yes, net worth estimates are all wrong and is more so a form of lust or wealth pornography for the underclass. the estimates have several assumptions that are all off. for example, aside from publicly disclosed equity holdings, nothing else is listed unless someone was sloppy about their real estate holdings. but for one-off payments, like an actor in a big movie, they assume it is never spent. they have no way of knowing anything, which is actually pretty nice. but I would say the whole list is completely wrong, even at the top, about who is at the top, even when limiting the list to non-state actor wealth. edit due to rate limit: this comment is purely about a data collection realities and limitations, and is devoid of any comment on tax realities
- JKCalhoun 5y ago
  > a form of lust or wealth pornography for the underclass I can't quite square your characterization with, for example, the reality that Warren Buffett's secretary pays a higher tax rate than he does. Some of us don't lust for wealth as much as we simply dislike that loopholes exist exclusively for the ultra-wealthy.
  - syshum 5y ago
    Because Capital gains is not income, and should not be treated as income... There are alot of problems with Capital Gains taxation in the first place (like for example the fact it does not factor in inflation at all which is a problem for assets held for a long time) Treating it pure income is not the solution
    - larkost 5y ago
      I get capital gains from dividends and stock sales. How do you figure that that is not income? I literally do no work for that money, but am charged less in taxes for it than that on my salary. But it is new money adding to my wealth. How is taxing that at a lower rate anything but privileging those who are better off (I don't think of myself as rich, but others may dispute that). I understand your point about inflation, but then you would have to count that in in interest earnings, and a lot of other places. The Federal Reserve essentially uses inflation as a club to force people to keep their money moving, thus simulating the economy. Why would we kill that club for capital gains? Treating capital gains as regular income absolutely is a solution to even out the playing field. I would even take taxing them at more (even though it hits my pocket book). But an even playing field where business owners don't get to play around with their income to have it rated better than their employees sounds like a good start.
Jensson 5y ago
> Not sure how we got from 600B to 160B. Also, isn't that closer to 6TN versus 7TN over a decade? 600B is the full tax gap, 160B is what the richest 1% are not paying. It is very clear if you read the previous sentence: > the wealthiest 1% of US taxpayers are responsible for an estimated $163bn in unpaid tax each year, amounting to 28% of the “tax gap”.
- leereeves 5y ago
  The top 1% pay 40% of income taxes, and 30% of all taxes[1], so if they failed to pay taxes at the same rate as the other 99% of Americans, they should be responsible for 30% to 40% of the "tax gap", not just 28%. The numbers contradict the article. They actually say that the top 1% pay a larger percentage of the taxes they owe. 1: https://www.politifact.com/factchecks/2019/oct/17/rand-paul/fact-checking-rand-pauls-appearance-view/ https://www.politifact.com/factchecks/2019/oct/17/rand-paul/...
  - Dumblydorr 5y ago
    Isn't the 28% of tax avoidance in the rich saying nothing of the legal loopholes and legal tax schemes to avoid taxes, which the average folk don't have access to. And how does avoidance look by brackets, I'm sure the doctors and lawyers dodge less than CEOs, though they're all 1% members.
    - NovemberWhiskey 5y ago
      >I'm sure the doctors and lawyers dodge less than CEOs, though they're all 1% members. Virtually certain that's exactly the opposite of the truth. CEO income is primarily in the form of pay that's subject to income reporting and withholding - which are the areas which are least subject to misreporting. On the other hand, doctors and lawyers are more likely to have pass-through businesses like sole proprietorships, partnerships and S-corps - and those are the areas which the IRS considers to have the most misreporting.
  - dahfizz 5y ago
    > so if they failed to pay taxes at the same rate as the other 99% of Americans... Do you have any reason to believe this, to the point where you think the report is wrong? I find it much more likely that rich people simply don't commit tax evasion as much as less rich people. For one, they can afford the tax bill. They can also afford accountants and tax lawyers to help them lower their tax bill without commiting tax evasion.
cellis 5y ago
Many billionaires are not valued based on their "liquid" holdings but on multiples of some composite blend of their company's growth rate / revenue / profit / hype. Are you saying your friend is liquid and that Forbes has no idea or just that they are undervaluing his private business?
AceJohnny2 5y ago
> So even if you could capture it, the US is still spending quite a bit compared to income. A sovereign currency country is not a household. It's much more complicated than ("spend" > "income")=bad.
- Diggsey 5y ago
  Not that much more complicated - but perhaps that's because you're over-simplifying the case of a household spending more than it earns. As with a household, when spending exceeds income the government has to take out a loan (usually by issuing government bonds). That loan has to be paid back with interest, and so it only makes sense when you are paying for soemthing now that will save you more money in future than you would pay in interest. The main differences are quantitative - effectively the (US) government has an insanely high credit score, and so many people are willing to lend them money (buy bonds). If a household misses payments on a loan, it will worsen their credit score. Likewise, if the government prints more money to make the interest payments on bonds more manageable, then it also dis-incentivises entities from investing in those bonds in future. In both cases future borrowing will be at a higher interest rate. edit: Also, that's tax-payer money that's being spent paying off the interest on outstanding bonds, which could have instead been spent on healthcare or infrastructure.
  - mc32 5y ago
    I guess it's like having income, a mortgage and spending over your income but borrowing against your increased house valuation. If the price of housing keeps going up, you can keep on borrowing, if it goes down you default --just as many a country has had to do.
wahern 5y ago
> it's surprising that number isn't bigger Voluntary tax compliance rates are surprisingly high in the U.S., even higher than countries like Germany. See https://www.theatlantic.com/magazine/archive/2019/04/why-americans-dont-cheat-on-their-taxes/583222/ https://www.theatlantic.com/magazine/archive/2019/04/why-ame... It's a little known factoid that gets lost in all the cynical political rhetoric.
addicted 5y ago
$160bn/yr is about half the $3.5tn bill that people have been calling massive, since that $3.5tn is over 10 years. It’s probably more than half at present value.
cyanydeez 5y ago
itd be a bigger number only a decade ago.

newbamboo 5y ago

That was my gut reaction. 160bn is nothing to sneeze at but compared to a nearly 3 trillion deficit, it’s clear that taxing the rich (more) wouldn’t get us very far. Not that we shouldn’t try mind you, but I had imagined this would be a bigger figure.

Railsify 5y ago
They don't want to get us anywhere. They want to eliminate any large differences in wealth and try to make everyone equally poor and dependent on governments.
- quantified 5y ago
  I doubt very much that the top 1% have that in mind.
jdlshore 5y ago
That doesn't follow. If this is about tax evasion (according to other commenters; I haven't read the article), then it doesn't say anything about what could be gained by increasing the tax rate.
- WarOnPrivacy 5y ago
  Post WWII US had a 90% top marginal tax rate and a historic economy. By the time Jimmy Carter was president, the tax rate had been slashed by a third and his economy kind of sucked.
  - ch4s3 5y ago
    1. Almost no now paid that rate, tax deductions and clever strategies existed then too. 2. That captured about 20% of GDP in revenue, and we’ve never captured a larger percent for more than about a single year. 3. We currently capture north of 17% of GDP, which is the post war average.
- Applejinx 5y ago
  Exactly. This is not about taxing the rich more. It's about stopping them from committing crimes/fraud/etc in the system we've already got.
  - jokethrowaway 5y ago
    Given they need to hire agents to "decipher" their returns it probably means they're using legal loopholes and hiding the money outside of the US with complicated structures. Sure, they could start saying those loopholes are not good enough but then the political system would have a 600bn pressure to implement different loopholes or risk losing all of the tax revenue with people moving somewhere else. These days the USA main advantage is offering highly paid jobs and venture capital - and the ultra rich definitely don't need that. If they're still in the States and pay little tax, they most likely own the system.
    - kelnos 5y ago
quantified 5y ago
Are you saying “meh, not enough to worry about”? Any 160bn expenditure is, therefore that quantity of revenue is. The debt and deficit are so large that nothing is a large percentage, just like no one contributes significantly to climate change and Amazon is only 4-5% of retail sales.
kelnos 5y ago
Taxing the rich more is orthogonal. You can add higher tax brackets all you want, and it'll bring in more revenue. $600B (or the $160B piece owed by the top 1%) is just the gap between what everyone should be paying based on current tax rates, and what they actually are paying. If you increase the "should be paying" by, say, $1T by increasing taxes, that says nothing about what will happen to the rate of tax evasion. Sure, that $600B figure may go up, but so will overall tax revenues. And if this effort to crack down on tax evasion works, all the better.

dlp211 5y ago

> Not sure how we got from 600B to 160B. Also, isn't that closer to 6TN versus 7TN over a decade? They probably are using nominal dollars and the gaps per year are expected to increase at a rate similar to, or greater than, collected revenue.

vmception 5y ago

yes, net worth estimates are all wrong and is more so a form of lust or wealth pornography for the underclass. the estimates have several assumptions that are all off. for example, aside from publicly disclosed equity holdings, nothing else is listed unless someone was sloppy about their real estate holdings. but for one-off payments, like an actor in a big movie, they assume it is never spent. they have no way of knowing anything, which is actually pretty nice. but I would say the whole list is completely wrong, even at the top, about who is at the top, even when limiting the list to non-state actor wealth. edit due to rate limit: this comment is purely about a data collection realities and limitations, and is devoid of any comment on tax realities

JKCalhoun 5y ago
> a form of lust or wealth pornography for the underclass I can't quite square your characterization with, for example, the reality that Warren Buffett's secretary pays a higher tax rate than he does. Some of us don't lust for wealth as much as we simply dislike that loopholes exist exclusively for the ultra-wealthy.
- syshum 5y ago
  Because Capital gains is not income, and should not be treated as income... There are alot of problems with Capital Gains taxation in the first place (like for example the fact it does not factor in inflation at all which is a problem for assets held for a long time) Treating it pure income is not the solution
  - larkost 5y ago
    I get capital gains from dividends and stock sales. How do you figure that that is not income? I literally do no work for that money, but am charged less in taxes for it than that on my salary. But it is new money adding to my wealth. How is taxing that at a lower rate anything but privileging those who are better off (I don't think of myself as rich, but others may dispute that). I understand your point about inflation, but then you would have to count that in in interest earnings, and a lot of other places. The Federal Reserve essentially uses inflation as a club to force people to keep their money moving, thus simulating the economy. Why would we kill that club for capital gains? Treating capital gains as regular income absolutely is a solution to even out the playing field. I would even take taxing them at more (even though it hits my pocket book). But an even playing field where business owners don't get to play around with their income to have it rated better than their employees sounds like a good start.

Jensson 5y ago

> Not sure how we got from 600B to 160B. Also, isn't that closer to 6TN versus 7TN over a decade? 600B is the full tax gap, 160B is what the richest 1% are not paying. It is very clear if you read the previous sentence: > the wealthiest 1% of US taxpayers are responsible for an estimated $163bn in unpaid tax each year, amounting to 28% of the “tax gap”.

leereeves 5y ago
The top 1% pay 40% of income taxes, and 30% of all taxes[1], so if they failed to pay taxes at the same rate as the other 99% of Americans, they should be responsible for 30% to 40% of the "tax gap", not just 28%. The numbers contradict the article. They actually say that the top 1% pay a larger percentage of the taxes they owe. 1: https://www.politifact.com/factchecks/2019/oct/17/rand-paul/fact-checking-rand-pauls-appearance-view/ https://www.politifact.com/factchecks/2019/oct/17/rand-paul/...
- Dumblydorr 5y ago
  Isn't the 28% of tax avoidance in the rich saying nothing of the legal loopholes and legal tax schemes to avoid taxes, which the average folk don't have access to. And how does avoidance look by brackets, I'm sure the doctors and lawyers dodge less than CEOs, though they're all 1% members.
  - NovemberWhiskey 5y ago
    >I'm sure the doctors and lawyers dodge less than CEOs, though they're all 1% members. Virtually certain that's exactly the opposite of the truth. CEO income is primarily in the form of pay that's subject to income reporting and withholding - which are the areas which are least subject to misreporting. On the other hand, doctors and lawyers are more likely to have pass-through businesses like sole proprietorships, partnerships and S-corps - and those are the areas which the IRS considers to have the most misreporting.
- dahfizz 5y ago
  > so if they failed to pay taxes at the same rate as the other 99% of Americans... Do you have any reason to believe this, to the point where you think the report is wrong? I find it much more likely that rich people simply don't commit tax evasion as much as less rich people. For one, they can afford the tax bill. They can also afford accountants and tax lawyers to help them lower their tax bill without commiting tax evasion.

cellis 5y ago

Many billionaires are not valued based on their "liquid" holdings but on multiples of some composite blend of their company's growth rate / revenue / profit / hype. Are you saying your friend is liquid and that Forbes has no idea or just that they are undervaluing his private business?

AceJohnny2 5y ago

> So even if you could capture it, the US is still spending quite a bit compared to income. A sovereign currency country is not a household. It's much more complicated than ("spend" > "income")=bad.

Diggsey 5y ago
Not that much more complicated - but perhaps that's because you're over-simplifying the case of a household spending more than it earns. As with a household, when spending exceeds income the government has to take out a loan (usually by issuing government bonds). That loan has to be paid back with interest, and so it only makes sense when you are paying for soemthing now that will save you more money in future than you would pay in interest. The main differences are quantitative - effectively the (US) government has an insanely high credit score, and so many people are willing to lend them money (buy bonds). If a household misses payments on a loan, it will worsen their credit score. Likewise, if the government prints more money to make the interest payments on bonds more manageable, then it also dis-incentivises entities from investing in those bonds in future. In both cases future borrowing will be at a higher interest rate. edit: Also, that's tax-payer money that's being spent paying off the interest on outstanding bonds, which could have instead been spent on healthcare or infrastructure.
- mc32 5y ago
  I guess it's like having income, a mortgage and spending over your income but borrowing against your increased house valuation. If the price of housing keeps going up, you can keep on borrowing, if it goes down you default --just as many a country has had to do.

wahern 5y ago

> it's surprising that number isn't bigger Voluntary tax compliance rates are surprisingly high in the U.S., even higher than countries like Germany. See https://www.theatlantic.com/magazine/archive/2019/04/why-americans-dont-cheat-on-their-taxes/583222/ https://www.theatlantic.com/magazine/archive/2019/04/why-ame... It's a little known factoid that gets lost in all the cynical political rhetoric.

addicted 5y ago

$160bn/yr is about half the $3.5tn bill that people have been calling massive, since that $3.5tn is over 10 years. It’s probably more than half at present value.

cyanydeez 5y ago

itd be a bigger number only a decade ago.