Chinanews.com, March 23. According to the US Chinese website, the latest research by researchers and economists from the US National Revenue Service (IRS) found that the amount of tax avoidance by wealthy American families far exceeds previous estimates.
The IRS calls on the US Congress to allocate funds to support intensified audits of the incomes of these wealthy families.
According to this study, the top 1% of households in the United States are not reported to the IRS for up to 21% of their income.
In other words, about one-fifth of the actual income of the 1% of the rich have not paid taxes.
For those households that rank in the top 0.1% of their wealth, the size of their income that is not reported to the IRS is nearly twice the taxable income calculated according to the traditional tax calculation method. tax.
The tax avoidance methods of wealthy families include a series of complicated strategies that cannot be monitored by general audits.
One of them is offshore tax avoidance.
However, due to stricter overseas tax filing requirements that began a decade ago, the use of this method has decreased.
Another way is to use the company’s partner status or other similar status to avoid taxation.
According to research by economists at the London School of Economics and Political Science, there are more and more wealthy people using this method, because the company's structure design is complicated and the tax department is becoming more and more difficult to find this loophole.
Including investment funds, real estate companies, family businesses, etc. usually design this kind of partner structure.
IRS Commissioner Charles said on March 22, local time that based on this research, he called on Congress to allocate more funds to support the IRS to investigate similar tax avoidance in a congressional hearing last week.
He also added that according to estimates, for every US$1 allocated to IRS to hire experts to conduct investigations, an income return of US$5 to US$7 can be obtained (the rich pay back taxes).
Over the past decade, due to budget cuts, the IRS’s tax audit and enforcement departments have gradually declined.
US President Biden and many other Democrats have previously proposed to change this trend and re-expand the size of the tax department.
Some Republicans have also expressed an open attitude to this proposal before.
Previously, there have been multiple reports predicting that if the IRS strengthens its audit, it can collect up to $1 trillion in taxes in the next ten years without the federal tax increase.
However, some scholars have pointed out that the concealment and complexity of tax avoidance methods may also make the estimated figures in these reports inaccurate, and may actually exaggerate the scale of taxes that the IRS can collect.