I am about to heal more than half of the budget deficit for the next decade. Theoretically, at least.
Do not involve these increases. We do not even need to reduce spending. Actually, we could raise a little spending. Ultimately, we shave the deficit of billions of dollars over the next 10 years.
It seems impossible? It is not the case. Unlikely, Yes, but keep reading. This should begin to make sense.
Tax evasion has added $ 3 trillion to the deficit over the last decade alone, an average of 300 billion dollars per year, according to data from the IRS. This is not income lost tax write-offs, as the mortgage interest deduction. It is not yet, as the IRS notes, "taxes that should have been paid on the income of the illegal sector of the economy". That $ 300 billion represents the amount of lost income of people deliberately cheat on their taxes every year. This includes the underreporting income, hidden bank accounts, trusts sham and other ways to unlawfully stiff the IRS.
Put this money in perspective. Tax fraud in the last decade, a sum equivalent to the Bush, the Obama stimulus tax cuts and the wars in Iraq and Afghanistan... of the combined costs. That $ 300 billion is the budget of the Ministry of education of more than four times and 10 times what we spend on science and technology. It is surprising that more people are not outraged by this stuff. Rather, they probably would be if they knew about it.
More than a few figures: according to the Bureau of the Budget from Congress, the cumulative deficit budget over the next 10 years is $ 6.97 billion. How is the additional debt, we will accumulate if current laws remain unchanged.
Now extrapolate the tax fraud in the last decade to another and adapt to inflation and economic growth. We are probably looking for 4 billion dollars in tax fraud over the next 10 years.
And there it is. Without higher rates of taxation or the reduction of expenditure, we could eliminate more than half of our deficit planned over the next 10 years by simply eliminating the fraudsters.
It is irrational, of course. It will never happen. As I said, this is moot. There will always be fraudsters. But stressing these figures is important for several reasons.
1 Prioritization of
I have often said that every politician seriously in the fight against the deficit should focus on a single issue: costs of health care. This is where essentially all are the long-term budgetary pressures. But after reviewing data tax-cheat, I think that there is a new qualifier: tackling tax evasion should be a priority in the short term. Areas which have been to pay attention deficit recently pale compared to what could be saved by exercising the application of the tax law. Cracking down on fraudsters is also probably the most politically feasible way to reduce deficit. It is simply to enforce the existing rules, rather that of defining a battle by changing rules of ways someone can find biased and unfair.
2 Investing
A plan of deficit reduction earlier this year proposed cutting the IRS budget $ 603 million. The Cup was finally abandoned and for good reason: the IRS Douglas Shulman Commissioner noted that the cuts would reduce tax collections by 4 billion per year, increasing deficits by a factor of six-against-one. This underlines an important point. The IRS agents can be very good investment for taxpayers. An officer from the application of the Act making $ 60,000 a year that a large case of cracks pays for his entire career. Any global deficit reduction planshould increase the budget from the IRS.
3. Learning from others
The Greece is a good example of what happens when the evasion is ignored. Current state of the Greece as a slave near bankrupt grip to his creditors caused by many factors, but the most important was an endemic culture of tax evasion. Only chumps followed the rules. Emphatic contempt for the tax man has become the norm.
Michael Lewis has done a wonderful job exposing this culture in an essay published year last in Vanity Fair. "Somewhere between 30 and 40% of the activity in the Greek economy that may be subject to tax revenue does are not officially mentioned," writes Lewis.
He continued: "the extent of Greek tax fraud was at least also amazing that its field of application: about two-thirds of Greek physicians reported incomes less than 12,000 euros per year - , which meant, because the income is less than this amount were not taxable., that even plastic surgeons making million a year paid no taxes at all the. ?
In a Greek city, 324 residents admitted having pools - an asset which increases property taxes. A satellite photo shows that the actual number of pool owners is 16,974. Nothing surprising Greece was there where it is today when 98% of the population cheats on their taxes.
We could next?
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