IRS to raise $50 billion over 10 years by closing loophole exploited by the wealthy
Category: News & Politics
Via: perrie-halpern • 4 months ago • 4 commentsBy: Rob Wile and Kate Dore
S E E D E D C O N T E N T
The IRS estimates it will raise more than $50 billion over the next decade by closing a loophole often exploited by wealthy filers seeking to avoid paying taxes.
The loophole allows such taxpayers, as well as businesses, to move assets between entities in a way that authorities say has no economic purpose. Deputy Treasury Secretary Wally Adeyemo called the practice "really just a shell game" in a statement.
The use of such pass-through businesses has increased 70% from 2010 to 2019 and helped allow the top 1% avoid paying $160 billion in taxes, Treasury said.
"Treasury and the IRS are focused on addressing high-end tax abuse from all angles, and the proposed rules released today will increase tax fairness and reduce the deficit," Treasury Secretary Janet Yellen said in a statement.
The plan builds on ongoing IRS efforts to increase audits of the wealthiest taxpayers, large corporations and complex partnerships.
"These tax shelters allow wealthy taxpayers to avoid paying what they owe," IRS Commissioner Danny Werfel told reporters on a media call Friday.
President Joe Biden's top economic adviser last week unveiled the administration's "key principles" for tax policy, including sustained IRS funding.
"We should ensure ultra-wealthy taxpayers pay what they owe and play by the same rules by maintaining the President's investment in the IRS," White House national economic adviser Lael Brainard told reporters Wednesday.
IRS funding has been a target for Republicans and conservatives since Congress approved nearly $80 billion in funding through the Inflation Reduction Act.
The GOP has promised to reduce that funding, having already succeeded in clawing back $20 billion. House Speaker Mike Johnson, R-La., has promised to strike at least $10 billion more from the 2025 budget.
Associated Press contributed.
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$50 billion isn't even a third of the cost of Biden's student loan forgiveness. Biden has already triple spent this added revenue.
So, closing these loopholes appears to be nothing more than political pandering rather than any sort of fiscal responsibility. The Biden administration is only wanting to punish the wealthy to score political points. " Looky, looky, we stuck it to the rich. " And it's not clear if this added revenue would pay for allowing the cap on SALT deductions to sunset as Democrats want.
"These tax shelters allow wealthy taxpayers to avoid paying what they owe," IRS Commissioner Danny Werfel told reporters on a media call Friday.
Gee, I thought that tax shelters were legal. The next thing ya know, they'll be taxing your net worth, and then your savings accounts.
There have already been efforts made to tax unrealized capital gains.
I guess I'm confused. I thought tax laws were passed by Congress, not the IRS. Are not these "loopholes" created by Congress? If so, how can the IRS just decide to close them?