Thursday, April 20, 2017

Robert Reich: 4 REASONS WHY TRUMP’S PLAN TO STRIP THE IRS IS INCREDIBLY DUMB


We need taxes and we need tax reform. No one can be a member of a country club, bowling team, or run in the Boston Marathon, without contributing to the funding that makes it possible to do so. 

Just like members pay fees (taxes in a sense—the difference is one is voluntary and the other is not—but to participate you must pay the fee) for rights and services the membership provides, all of us must pay taxes. We are members of the United States of America that some claim to be the greatest organization in the world, and in order to be a member and participate in the benefits offered we must pay taxes.

However to ‘strip the IRS’ of funding, as Trump proposes, is not tax reform.

As Robert Reich points out, it’s a bad idea:

Donald Trump is proposing a 14.1 percent cut in the I.R.S.’s budget next year. This is incredibly dumb, for four reasons:

1. It won’t save money. To the contrary, this move worsens the budget deficit. That’s because every dollar spent by the IRS to collect taxes generates $4 in unpaid taxes.

2. It worsens the federal budget deficit. The current estimate of unpaid taxes per year is almost as large as the federal government’s annual budget deficit.

3. It widens inequality. Since most IRS audits are of high-income people, the real beneficiaries of Trump’s move are the wealthy, more of whom will now be able to skirt their duty to pay taxes.

4. The IRS is already understaffed. The number of individual tax return audits fell last year to its lowest level since 2004, and enforcement levels were already down by nearly 30 percent from 2010.

Donald Trump hates the IRS and has spent years battling it. There’s reason to think he doesn’t even want to pay his own taxes. But this is no reason to explode the Federal Budget Deficit and give another windfall to the rich.





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