{"id":2034,"date":"2021-03-22T20:14:20","date_gmt":"2021-03-22T20:14:20","guid":{"rendered":"https:\/\/www.pbmv.com\/blog\/?p=2034"},"modified":"2021-03-22T20:14:20","modified_gmt":"2021-03-22T20:14:20","slug":"irs-researchers-top-1-percent-avoids-taxes-on-one-fifth-of-their-income","status":"publish","type":"post","link":"https:\/\/www.pbmv.com\/blog\/?p=2034","title":{"rendered":"IRS researchers: Top 1 percent avoids taxes on one-fifth of their income"},"content":{"rendered":"

By Niv Elis<\/a><\/p>\n

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The top 1 percent of households in terms of income fail to report an astonishing 21 percent of their income to the IRS, according to a new paper co-authored by IRS researchers and prominent academics in the National Bureau of Economic Research.<\/p>\n

In comparison, the paper found<\/a> that the bottom half of earners fail to report about 7 percent of their income.<\/p>\n

The IRS captures data on most wage income from employers, who report the wages they pay through W-2 forms. Other income, however, earned from freelance work, collecting rent, self-employment and other avenues, must be reported directly.<\/p>\n

Of the 21 percent of income unreported from the top tier of earners, 6 percent reportedly comes from avoidance methods that even audits would have trouble finding, such as undeclared foreign accounts and the use of pass-through businesses to hide income.<\/p>\n

In comparison to previous estimates, the study finds that unreported income is larger by a factor of 1.1, a figure that rises to 1.3 for the top 1 percent and 1.8 for the top 0.1 percent.<\/p>\n

Unreported income will account for some $600 billion in lost government revenues this year, and $7.5 trillion over a decade alone, according to The New York Times<\/a>.<\/p>\n

Though the new analysis focused on a few types of tax avoidance in particular, the researchers said the true figures are even higher.<\/p>\n

“We stress that our estimates are likely to be conservative with regard to the overall amount of evasion at the top,” they wrote.<\/p>\n

In recent years, audit rates have declined, particularly for the rich, as IRS funding was scaled back. A Congressional Budget Office report from July found<\/a> that audit rates dropped 46 percent from 2010 to 2018, and fell 61 percent for millionaires in the same time period.<\/p>\n

The latest findings, the National Bureau of Economic Research researchers argue, show that tax evasion bolsters inequality.<\/p>\n

One of the paper’s co-authors, University of California-Berkeley economist Gabriel Zucman, has made policy waves with his research on inequality before. Sen. Elizabeth Warren (D-Mass.) used much of his work as the basis for her wealth tax proposals.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Niv Elis The top 1 percent of households in terms of income fail to report an astonishing 21 percent of their income to the IRS, according to a new paper co-authored by IRS researchers and prominent academics in the National Bureau of Economic Research. In comparison, the paper found that the bottom half of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2034","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/2034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2034"}],"version-history":[{"count":1,"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/2034\/revisions"}],"predecessor-version":[{"id":2035,"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/2034\/revisions\/2035"}],"wp:attachment":[{"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pbmv.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}