It’s time to call out the GOP. Oh, wait, I have to be more specific, since they have so many recent failings.
From conversion as a political party to a TrumpCult, to considering the 6 January a frolic and not an insurrection, or restricting the voting capabilities of minorities. No, those are all valid issues, but this one involves the recent (almost? permanent?) failure of the bipartisan infrastructure bill.
One of the biggest reasons for the failure is the “payfor” provision. The GOP does not want to have the IRS hire more employees, since it will be able to go after all those wealthy folks who cheat- and the corporations that have been cheating forever.
Since the GOP cut the IRS budget about a decade ago, companies in the S&P 500 have some $ 235 billion in questionable tax claims awaiting audit. (That’s a 43% increase in just one year- but much larger when one goes back a decade.) As a matter of fact, the IRS rarely investigates large firms- mostly because those businesses have the ability to hire tons of lawyers to tie up in claims and court actions the few auditors that the IRS has on hand. (NOTE: Regulations afford companies the right to claim questionable tax breaks- even if they know they won’t prevail- as long as the case has not been fully adjudicated by the IRS.)
One should note that the FASB (Financial Accounting Standards Board) requires publicly traded entities to disclose (estimate) the likelihood of their claimed tax benefits to be approved or rejected. (If the estimate exceeds 50%, the company must records same as an unrecognized tax benefit. In essence, this is a loan from the IRS, since it will probably have to be repaid.) It should not surprise you that one of the biggest perpetrators of this (potential) fraud is Apple- the firm I often cite as a tax scofflaw. But, they are not alone- Exxon and AT&T are in the same lofty (or is that paltry) zone. These firms are banking that the IRS will not complete the audit of their inflated claims in the required time. (The audit period is usually 3 years.)
Moreover, these firms are the ones that report the lowest tax rates (because they have removed a series of taxable activities from their payments) as is seen below.
It’s time (OK- way past time) to fully fund the IRS to complete its mission.
Just another way that the rich stay rich, right? We have so many things that need to be managed, I don’t know when this will even make everyone’s radar screen!
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Of course, Dominique, when they read my blog!
Insightful article. Something I have never really thought about but it makes total sense to me.
Thank you so much for adding to the conversation, Belanie!
Exactly how the rich get richer.
I don’t think cheating is the primary method, but it certainly helps, Marcia.
The rich will do anything to stay rich and keep the poor down.
I wish I could disagree with that statement, Brenda.
That’s right! It’s way past time.
Et, voila!
It always seems like the little guy who tries so hard is the one that has to pay.
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Which is why we need to fully fund the IRS. Not only to go after the wealthy/corporate cheaters, but to make it possible for the little guy to reach an IRS representative when called.
The rich have all kinds of way to get richer, while the majority of people keep getting poorer. This is more and more a dangerous situation. I fear for our democracy.
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I fear for our democratic ways, too- but not because of this. WE need to fix this, however.