Wednesday, October 7, 2020
Los Angeles Times op-ed: Two Tax Systems. One For the Likes of Trump., by David Cay Johnston (Syracuse):
Whether the IRS will investigate Trump’s returns for possible criminal violations isn’t clear. What is clear is that the federal government has pretty much stopped enforcing the tax laws, especially when it comes to people like Trump who own businesses. ...
Congress has defunded the tax police. Since 2010, the number of tax returns has grown about 8%, but the number of IRS revenue agents, as auditors are called, has been cut 35%, criminal investigators 27% and the agency’s total staffing by 22%. ...
Our real concern as taxpayers should be that Congress has created two income tax systems, separate and unequal.
Under one system, most of us, who are employees, pay all our taxes, which are taken out before we get our money. The structure of the tax withholding system makes it very hard to cheat.
The other system, built for business owners like Trump, operates on the honor system. Cheating is supposed to be controlled largely because that class of taxpayers fear that IRS auditors will be checking. But deterrence cannot work when audits conducted of people in that group is less than 3%, down from 8% a decade ago and the risk of criminal prosecution is essentially zero.
Trump’s failure to pay taxes is a disgrace. But no more so than a federal tax system that makes it possible for him and millions of other taxpayers to avoid paying what they should rightly owe.