It now turns out that back in 2016, I was a tax cheat. And there’s been a lot of chatter about people chatting on their taxes because to get the budget deal done, Joe had to scale back somewhat his program to root out all those no-good bums whose cheating puts the social security payments for all those hard-working, law-abiding Americans at risk.
But what do the words ‘tax cheat’ actually mean? Or at least, how are those words defined by the government? Wasn’t cheating on taxes the way we nabbed Al Capone?
The government, in the form of the I.R.S., doesn’t actually use the phrase ‘tax cheat.’ They refer to a category of taxpayers as behaving in a way which creates a ‘gross tax gap,’ meaning the amount of money the government collects in tax payments versus the amount the government is owed.
How does the government figure out how much tax revenue it is owed every year? By the amount of money which Americans receive each year in payments that are legally taxed — i.e., earnings in the form of salaries, investments and other transfers of money which increase individual or business wealth.
The ‘gross tax gap’ is comprised of three things: non-filing of returns, underreporting of income, late payment of taxes due when returns are filed. Since 2014, the gross tax gap includes 13% of all the tax-paying population — in other words, more than 85% of the money’s folks owed the government each year are collected on time and in the correct amount.
That’s not bad when you consider that in Italy, for example, the rate of tax evasion is above 25% and overall in Western Europe, the avoidance rate is more than 3%, whereas our tax gap comes out to slightly less than 2% of what Uncle/Aunt Sam should be collecting every year.
Note that sticking income in one of those offshore accounts in some tax ‘haven’ isn’t the same thing as cheating the Treasury out of money owed. These so-called tax ‘dodges exist because there are more than 3,000 legal agreements between various countries covering how money moves from one destination to another, and no government, including our government, seems inclined to make any significant change in these laws.
So much for the bullshit the GOP now peddles about how the Soros Deep State is…