How Plutocrats Cripple the IRS

You pay more because elites use their influence to pay less.

By Martin Lobel

For every dollar appropriated to the Internal Revenue Service, the public collects more than $4 in taxes. Nonetheless, Congress has cut the IRS appropriations by $1.2 billion since 2010 while expanding the service’s administrative burdens by giving it responsibility for enforcing laws extraneous to tax collection, such as the Affordable Care Act. The IRS is also responsible for administering innumerable socioeconomic incentives in the tax code, including tax preferences for health care, retirement, social welfare, education, energy, housing, and economic stimulation, none of which are related to the IRS’s primary function of raising revenue—all with reduced funding.

Plutocrats, the richest 0.1 percent of Americans, get the most benefit from a weakened IRS. Because they have the money, the lawyers, the lobbyists, the accountants, and the secret campaign funds, they are able to ensure that the IRS won’t have the resources to effectively collect the money they owe to it. Plutocrats do this by devising tax shelters too complex for the IRS to challenge at an acceptable cost, and by having allies in Congress who intimidate the IRS from issuing tough regulations and who cut IRS funding to prevent adequate enforcement. (The top 0.1 percent consists of 115,000 individuals and families with an average income of $9.44 million. 40.8 percent of the top 0.1 percent are executives, managers, or supervisors of non-finance firms, and 18.4 percent are in the financial professions.)