TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, March 16, 2017

Making Tax Evasion Great: The $100 Billion Giveaway

Democracy Logo (2018)Democracy: A Journal of Ideas: Making Tax Evasion Great: The $100 Billion Giveaway, by Robert Gordon & David Kamin (NYU):

The President may talk about “law and order,” but apparently he excludes tax law.

President Trump’s Office of Management and Budget has proposed a 14.1 percent cut in funding for the Internal Revenue Service. If made permanent, we conservatively estimate that this cut will cost the Treasury $60 billion, just from direct revenue loss due to reduced enforcement (and netting out the reduced spending on IRS enforcement). This new cut follows a more than 20 percent real reduction in resources for IRS enforcement since 2010. Undoing that reduction could save the federal government an additional $30 to $40 billion. All together, the President’s failing to restore these previous cuts and then cutting even more allows handouts to tax evaders costing the Treasury about $100 billion over ten years.

For several reasons, these figures probably substantially understate the effects on the federal budget.

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Tax Gap: Always overstated and always under collected. Fact, the IRS fared better than any other agency, other than Defense. Fact, the Trump Budget takes the IRS back to 2007 levels, adjusted for inflation. Fact, the budget number is based on a downward revision of the 2010 plus up enacted under Obama. Opinion. When did you ever see a budget submission translated un-touched into an actual appropriations bill? Calm down.

Posted by: TheTurk | Mar 16, 2017 9:15:11 AM