Public Opposes The Trump/GOP Cuts To The IRS

The chart above reflects the results of the Economist / YouGov Poll -- done between May 16th and 19th of a nationwide sample of 1,710 adults (including 1,558 registered voters). The margin of error is 3.2 points for adults and 2.9 points for registered voters.
 

Cutting IRS Jobs Helps Rich Tax Cheats And Hurts Honest Taxpayers

The following is part of an article by Natasha Sarin in The Washington Post:

The U.S. DOGE Service estimates that its actions so far have saved taxpayers about $100 billion. These estimates have been riddled with errors, and their accuracy cannot be verified.

But even if these savings are to be believed, they pale in comparison to the amount of money DOGE is about to lose. Just one move — the plan to shrink the Internal Revenue Service’s staff by up to 50 percent — would, very conservatively, lead to a $400 billion increase in uncollected taxes over the next decade. It could easily mean more than $2 trillion in losses.

Today, the IRS fails to collect about $700 billion in taxes owed each year. We know that going after tax evaders has huge returns: Recent academic work suggests that every dollar spent on auditing people in the top 10 percent of earners returns $12. Prior estimates from the Treasury Department’s inspector general suggest that each additional hour spent auditing a high earner generates nearly $5,000 in additional tax revenue.

The IRS can do a lot more of this work. Today, its audit rate of partnerships (businesses that aren’t taxed as corporations because they pass their income through to partners) is 0.1 percent. The IRS has historically been unable to pursue high-income “nonfilers” — people who do not file taxes at all — because it doesn’t have enough personnel or up-to-date technology. Yet that is the easiest type of evasion to detect, and not pursuing it has cost the agency tens of billions of dollars.

Practically, we do not know how the IRS plans to shrink its workforce by 50 percent. But we do know it would blow a hole in the federal budget because it would mean less capacity to do high-return work, such as auditing the wealthy. If we assume the staffing reductions would affect all of the agency’s activities, that would mean half as many people answering the phones and half as many auditors in the field.

Tax season will be much less efficient without these employees. Just a few years ago, an understaffed IRS took years to process pandemic-era returns filed on paper, and during the 2022 filing season, it answered fewer than 20 percent of the calls that taxpayers made. Then, the agency had around 79,000 employees. The Trump administration is considering shrinking it to more like 50,000 employees — staffing at levels not seen since 1960, when the U.S. population was 160 million people smaller than it is today. . . .

Estimates from the Budget Lab at Yale, which I run, suggest that cutting the IRS by 50 percent would cost the agency nearly $400 billion ($350 billion net, once fewer salaries are accounted for) over the next decade. These estimates include both the direct losses to the agency from fewer audits and a conservative adjustment for “indirect” losses for the agency once its enforcement activity is depleted — i.e., people tend to be more comfortable running a red light if they don’t see any traffic cameras.

Much is uncertain, but here is an alternative, back-of-the-envelope estimate: Assume that a depleted IRS would lead taxpayers to evade more. If high-compliance taxpayers became medium-compliance taxpayers, and medium-compliance taxpayers became low-compliance taxpayers, losses could easily total well above $2 trillion, or about a 25 percent increase in unpaid taxes.

Beyond the revenue losses, such a tax system is inequitable. Americans who earn wages would still be fully compliant with their tax obligations, as their taxes are withheld. But those who earn income in opaque ways would have carte blanche to cheat, with a paucity of tax police on the beat. Those are disproportionately higher earners: Nearly 30 percent of unpaid taxes, or about $200 billion annually, comes from the top 1 percent. (The bottom 20 percent underpays by just $2 billion.)

GOP Will Protect Rich Tax Dodgers By Cutting IRS Funds

 The following is part of an op-ed by Greg Sargent in The Washington Post:

Republicans have been amplifying the claim lately that their party has undergone a “populist” makeover, rendering it both anti-elite and pro-working class. One way Republicans purport to illustrate this is by attacking President Biden’s expanded funding for the Internal Revenue Service, insisting that it empowers a strike force of bureaucrats to prey on ordinary Americans.

But new data on tax avoidance by the ultrarich badly undermines GOP claims to being an anti-elite, pro-worker party. It shows that if Republicans get their way with regard to the IRS, a nontrivial number of very rich Americans would continue to underpay taxes they owe, effectively making out like bandits — some literally so.

Nearly 1,000 tax filers who earn more than $1 million per year have still not filed federal tax returns for at least one year from 2017 to 2020, according to IRS data provided to Senate Finance Committee Chairman Ron Wyden (D-Ore.).

What’s more, the 2,000 people who represent the highest-income non-filers in one or more of those years owe a total of more than $900 million in federal taxes, the data shows.

“These are people who essentially blow raspberries at the IRS,” Wyden told me. “They’re sophisticated people. They know this is wrong, wrong, wrong. And they do it anyway.”

The data underscores that when the IRS is underfunded, wealthy tax cheats benefit in a big way. An underfunded IRS is what Republicans are advocating for. . . .

Biden’s Inflation Reduction Act, signed last year, included $80 billion in additional IRS funding. Biden sought it specifically to bring in more revenue by targeting wealthy tax cheats.

But House Republicans voted this year to repeal that funding. Many GOP presidential candidates, including Florida Gov. Ron DeSantis, Sen. Tim Scott (S.C.) and businessman Vivek Ramaswamy, have attacked it. Republicans claim it will be used to target small businesses and workers — burnishing the GOP’s supposed pro-worker credibility.

Unfortunately for Republicans, enforcement funded by that law has paid off — bringing in more than $38 million from 175 rich tax delinquents, the IRS announced in July. And this month, the agency announced plans to use the funding for still more efforts targeting wealthy tax avoiders. . . .

An irony to the GOP’s “working class” positioning is worth noting. Jean Ross, a tax expert at the Center for American Progress, points out that high-end avoiders — such as those documented in the IRS data — often can afford lawyers and accountants who aggressively shield income. By contrast, wage earners’ incomes are reported to the IRS by employers.

So while Republicans claim that funding the IRS will disproportionately hurt ordinary Americans, doing so actually makes it more likely that elites and workers will be treated equivalently. “It moves us closer to a world where everybody pays the taxes they legally owe,” Ross says, “rather than continuing current disparities, where unpaid taxes are disproportionately owed by the very wealthy.” Republican policies would make those disparities worse. . . .

If Republican efforts to defund the tax police prevail, the real winners will not be workers and small businesses but a subset of wealthy elites — who will chortle all the way to the bank.

IRS Failure To Audit Trump & The Rich Is A Huge Problem

The following is from the editorial board of the Houston Chronicle:

After years of fighting to keep them private, former president Donald Trump’s tax returns have finally seen daylight, thanks to the diligent efforts of the House Ways and Means Committee. The release followed the committee's report summarizing many of the findings earlier in the month. 

"A president is no ordinary taxpayer," committee chairman Rep. Richard E. Neal (D-Mass.) said in a statement. "They hold power and influence unlike any other American. And with great power comes even greater responsibility."

More than a time-honored tradition of our most powerful elected official, turning over tax returns is critical for the American public to get an understanding of who is sitting in that office, and who else they might be beholden to. It took a massive effort to wrest these returns from Trump’s sticky fingers and deliver them to the citizens he was elected to represent. There was public pressure, Congressional inquiries and lawsuits that reached the United States Supreme Court. 

So what did we learn from the thousands of pages of information?

More shocking than the years Trump managed to pay just $750 in taxes, the year he paid none at all or his ongoing business deals with foreign companies while president, is the inaction on the part of the IRS. Since the 1970s, presidential tax return audits are supposed to be automatic and annual.

“The IRS did not even begin auditing Trump’s taxes until 2019,” Noah Bookbinder wrote in the Atlantic, “on the same day the committee began asking the agency about them.”

Alarm sounded.

“That Trump has avoided paying taxes and engaged in questionable practices is hardly new,” Timothy L. O’Brien is senior executive editor of Bloomberg Opinion and author of “TrumpNation: The Art of Being the Donald” wrote ahead of the release.

While that doesn’t mean his dealings are any less concerning, it does make the revelation that the IRS failed to audit Trump’s returns stand out all the more.

That alone needs investigating.

The IRS doesn’t have a great track record when it comes to going after the rich and powerful. In the agency's defense, dealing with high-powered attorneys requires more resources than going after an ordinary, middle-class taxpayer who probably can't afford an attorney at all. And the IRS budget operated on a starvation diet for years. 

Indeed, the agency audits poor families five times more often than it does everyone else, according to a recent analysis of 2021 data from Syracuse University. Of the nearly 9 million residents who reported incomes between $200,000 and $1 million, fewer than 40 individuals had their tax returns audited by the IRS in fiscal year 2021.

Poor people are simply low-hanging fruit, easily intimidated into submission by jargon-laden letters demanding technical information that's often difficult for families to produce, let alone understand. If anyone needed assistance,  according to Erin M. Collins, the National Taxpayer Advocate’s recent Congressional report on the agency’s actions, they were often stuck calling an understaffed toll-free number that was rarely answered— even after hours of waiting on hold.

“There is no way to sugarcoat the year 2021 in tax administration: From the perspective of tens of millions of taxpayers, tax administration did not work for them,” the report begins.

This is especially galling knowing just how seldom America’s wealthiest citizens pay their fair share of taxes. Elon Musk paid zero dollars in federal income tax in 2018, something Jeff Bezos, Michael Bloomberg and George Soros can also brag about, per a recent ProPublica investigation.

Even knowing the IRS’ punitive and uneven approach to auditing, it is still alarming that it would shirk its legal obligation to audit Trump’s returns, until enough public pressure pushed them to.

In 2022, when President Joe Biden signed legislation that added $45 billion to the IRS’ enforcement efforts, it raised alarms. "Biden Admin Targets Lower & Middle Income Earners," read one release from the House Ways and Means Committee Republicans. There is no 87,000-strong army of auditors on the way but there will be more audits although the administration promised they would target higher earners: "It’ll lower the deficit and ask the ultra-wealthy and corporations to pay their fair share," a White House release said of the legislation. 

Will they actually target the billionaires doing everything they can to avoid giving even a dime to the running of this country? Or will they simply step up the nickel-and-diming of America’s poorest families?

When it comes down to it, the IRS has long been stretched thin. As bean counters working with scant resources and an ancient data system, their priorities are heavily influenced by levels of funding from Congress and perhaps, the political will of those in power, namely the guy in the White House.

The IRS' failure to audit Trump while in office warrants scrutiny for the agency and also for those who oversee it and fund it. 

How much do we blame the bureaucrats and how much to blame the people above them? It's up to Congress to make sure the IRS is funded enough to do properly do its job. And with this new funding, the IRS should, in fact, live up to the administration's promises and ensure that all taxpayers—presidents and everyday millionaires alike—pay their way. 

Our government is funded on a good-faith agreement that Americans will share the burden, fairly. If too few tax dollars are collected, we must either resort to cutting, borrowing or shifting the burden on lower-income people who can least afford it. 

Voters Are Not Worried About Increasing Size Of The IRS

These charts are from a new Politico / Morning Consult Poll -- done between August 5th and 7th of a nationwide sample of 2,005 registered voters, with a 2 point margin of error.

Republicans tried to defeat the Inflation Reduction Act by trying to scare voters about increasing the size of the IRS. It didn't work. 

Raise Taxes On Rich (And Then Make Them Pay It)

 

Much has been said about raising taxes on the rich, and that certainly needs to be done. But raising taxes would be meaningless unless we also fully fund the IRS. If the rich avoid paying taxes at the current rate, they will also do it at a higher rate. The only way to prevent that is to make sure there are enough IRS investigators to expose the tax evasion and punish it.

Here's how former Labor Secretary Robert Reich puts it:

Taxing the rich doesn’t just entail closing tax loopholes and instituting a new wealth tax. It also means ensuring they pay what they owe in the first place — and that means boosting the Internal Revenue Service’s funding.

The richest 1 percent of Americans evade $163 billion every year in taxes. How do they get away with it? Because the IRS doesn’t have the tools and resources available to audit these wealthy tax cheats.

Over the past 10 years, the IRS budget has been reduced by roughly 20 percent. And as of last year, the IRS had 9,510 auditors — down a third from 2010. The last time the IRS had fewer than 10,000 revenue agents was 1953, when the economy was a seventh of its current size.

The result? Millionaires in 2018 were about 80 percent less likely to be audited than they were in 2011, and now the poorest taxpayers are audited at about the same rate as the top 1 percent. 

When asked by Congress why this is, the IRS said that auditing poor taxpayers is a lot easier because it’s done by relatively low-level employees. These audits are “the most efficient use of available IRS examination resources.”

Beefing up IRS enforcement is a critical part of cracking down on wealthy tax cheats and ensuring the super-rich pay their fair share. 

Every $1 invested in the IRS budget produces $4 in revenue.   

Imagine what programs we could fund, how many people we could help, if the IRS was able to recoup that $163 billion that the top 1 percent shorts the government every year. Fully funding the IRS should be a no-brainer.

Adequately Fund IRS Enforcement (Or See Your Taxes Rise)

The chart above shows the number of IRS enforcement officer since 2007. Note that, thanks to Republican cuts to the IRS, the number of officers has declined significantly. That means that many citizens (those who can afford accountants and attorneys) are now evading paying the taxes they owe -- billions of dollars each year. Why should you care? If these tax evaders are not caught, you can expect taxes to rise for workers who pay their taxes. It's time to fully fund the IRS's tax enforcement efforts!

The following is part of an op-ed on this subject by Catherine Rampell in The Washington Post:

Here’s one issue that both the left and right should be able to agree on: Fund the police. Specifically, the tax police.

If you care about “law and order,” if you think unpatriotic hucksters are getting away with scamming Uncle Sam or, heck, if you don’t want your own taxes to increase, you should demand to beef up the Internal Revenue Service.

Yet for some reason the leading lights of the conservative movement are trying to block tax cops from enforcing the law.

While nearly all Americans say that paying taxes is a civic duty, some scofflaws nonetheless shirk. The difference between what Americans legally owe in taxes and what they actually pay is an estimated $554 billion per year. Part of the reason the tax gap is so enormous is that the agency tasked with collecting revenue and detecting cheats has been starved of resources.

During the past decade, the IRS budget has been slashed more than 20 percent in inflation-adjusted terms. Meanwhile, the agency has been loaded up with more complicated responsibilities, including implementing the Foreign Account Tax Compliance Act; combating identity theft; issuing pandemic stimulus payments; and, starting next week, lifting millions out of poverty through monthly child benefits.

Something had to give, and that something has largely been enforcement. The number of IRS personnel in key enforcement occupations has fallen by 40 percent.

Audit rates of the wealthy and large corporations have, unsurprisingly, also plummeted.

In 2012, for example, nearly every corporation with more than $20 billion in assets was audited. Last fiscal year, that share had dropped to just more than a third, according to Syracuse University’s Transactional Records Access Clearinghouse (TRAC). Such audits uncovered $10 billion in unreported taxes in 2012, vs. $4.1 billion last year. . . .

The pseudointellectual brain trust that has long powered the GOP is now lobbying againstadequately funding the IRS. Which proves that these anti-tax crusaders are (and have long been) a bunch of unserious grifters — less interested in “generating economic growth” than in lining their own pockets.

Among the backers of the lobbying effort are billionaire Robert Mercer and notorious charlatanStephen Moore, both of whom have previously run into trouble with the IRS for alleged tax dodges. They’re part of a consortium that once claimed to care about cutting tax rates to supercharge the economy but has apparently dropped the pretense. Making sure taxes legally owed are actually collected is not only fairer; it also helps keeps rates down. When tax compliance is higher, the government can set rates lower and still collect the same amount of revenue.

Inversely, when some people don’t pay their bills, the rest of us have to pay more to make up the shortfall. . . .

The people fighting to starve the IRS are the people who imagine the law doesn’t apply to them, only to the little people. If you want these thugs to pay what they owe, put more tax cops on the beat.

We Need To Collect Taxes On Money The Wealthy Hide

Republicans like to claim the federal government is spending too much money. Democrats counter that taxes should be raised on the rich so the government can do more to help citizens.

But both seem to ignore the money that some people (especially the upper income people) are hiding from the IRS to avoid paying taxes on it. If these tax cheats could be forced to pay on all their income, billions of dollars more could go into the federal treasury each year.

Part of that money could be collected by simply beefing up the IRS's ability to go after the tax cheats. But more is needed. The IRS needs a way to know how much money is coming in to these tax cheats (like a W-2 tells them how much a worker makes in wages). And there is a way to do that.

The following is from the editorial board of The New York Times on how to collect taxes on the money that is currently hidden:

The withholding system remains the cornerstone of income taxation, effectively preventing Americans from lying about wage income. Employers submit an annual W-2 report on the wages paid to each worker, making it hard to fudge the numbers.

But the burden of taxation is increasingly warped because the government has no comparable system for verifying income from businesses. The result is that most wage earners pay their fair share while many business owners engage in blatant fraud at public expense. 

In a remarkable 2019 analysis, the Internal Revenue Service estimated that Americans report on their taxes less than half of all income that is not subject to some form of third-party verification like a W-2. Billions of dollars in business profits, rent and royalties are hidden from the government each year. By contrast, more than 95 percent of wage income is reported.

Unreported income is the single largest reason that unpaid federal income taxes may amount to more than $600 billion this year, and more than $7.5 trillion over the next decade. It is a truly staggering sum — more than half of the projected federal deficit over the same period.

The government has a basic obligation to enforce the law and to crack down on this epidemic of tax fraud. The failure to do so means that the burden of paying for public services falls more heavily on wage earners than on business owners, exacerbating economic inequality. The reality of widespread cheating also undermines the legitimacy of a tax system that still relies to a considerable extent on Americans’ good-faith participation.

Proposals to close this “tax gap” often focus on reversing the long-term decline in funding for the I.R.S., allowing the agency to hire more workers and to audit more wealthy taxpayers. But Charles Rossotti, who led the I.R.S. from 1997 to 2002, makes a compelling argument that such an approach is inadequate. Mr. Rossotti says that Congress needs to change the rules, by creating a third-party verification system for business income, too.

The core of Mr. Rossotti’s clever proposal is to obtain that information from banks. Under his plan, the government would require banks to produce an annual account statement totaling inflows and outflows, like the 1099 tax forms that investment firms must provide to their clients.

Individuals would then have the opportunity to reconcile what Mr. Rossotti dubs their “1099New” forms with their reported income on their individual tax returns. One might, for example, assert that a particular deposit was a tax-exempt gift.

Mr. Rossotti has proposed that the I.R.S. require the new forms only for people with taxable income above a generous threshold. A bill including Mr. Rossotti’s plan, introduced by Representative Ro Khanna of California, sets that threshold at $400,000, to minimize the burden on small business. The money is undoubtedly in chasing wealthy tax cheats, but equity argues that business income, like wage income, should be subject to a uniform reporting standard. Small businesses ought to pay their taxes, too.

The proposal would not increase the amount anyone owes in taxes. It would, instead, increase the amount paid in taxes by those who are currently cheating.

It would have the immediate benefit of scaring people into probity. . . .

To realize the full benefit of the new data, however, Congress does need to make a significant investment in upgrading the I.R.S.’s outdated computer systems, and in hiring enough qualified workers to examine suspicious cases and to hold accountable those who cheat. . . .

Congressional Republicans, unable to muster public support for reductions in federal spending, have pursued that goal indirectly by constraining federal revenue, in part by hacking away at the I.R.S.’s budget. The share of all tax returns subject to an audit declined by 46 percent from 2010 to 2018, according to the Congressional Budget Office. For millionaires, the decline in the audit rate was 61 percent. Today, the government employs fewer people to track down deadbeats than at any time since the 1950s.

The result is a parallel increase in federal debt and in tax fraud.

Mr. Rossotti, together with the Harvard economist Lawrence Summers and the University of Pennsylvania law professor Natasha Sarin, argued in an analysis published in November that investing $100 billion in the I.R.S. over the next decade, for technology and personnel, in combination with better data on business income, would allow the agency to collect up to $1.4 trillion in lawful tax revenue that otherwise would go uncollected.

GOP Say Relief Bill Too Expensive - Call Their Bluff!

 Not a single Republican voted for the COVID Relief Bill. They tried to claim it was just a liberal wish list, but the public was too smart to buy that weak argument. Now they have shifted to a new argument -- that the bill is too expensive and the country can't afford to do it.

That's a rather hypocritical argument coming from the party that gave trillions in tax breaks to the rich and corporations. But there is a way to call them on their bluff about it being too expensive a bill. 

Here's what Washington Post columnist Greg Sargent says the Democrats should do:

President Biden’s $1.9 trillion rescue package has extraordinarily broad public support, and it’s likely to juice the economic recovery, but Republicans are playing the long game. Their scheme is to admit the economy is improving, but say it’s unrelated to Biden’s stimulus — then pivot to bashing Democrats for overspending.

“This bill won’t speed up our return to normal,” says House Minority Leader Kevin McCarthy (R-Calif.), admitting normalcy is returning, before adding that the bill will “burden future generations with unnecessary debt.”

As the New York Times reports, Republicans are betting voters will become “disillusioned with the scope and price of the plan,” and “punish Democrats accordingly.”

Here’s a way for Biden and Democrats to counter this attack: move to increase funding for the Internal Revenue Service so it captures some of the trillions of dollars in revenue that are expected to go uncollected in the next decade.

This is more than just good politics. It could also help bolster voters’ faith in public spending and progressive governance at a moment of great opportunity to seize on momentum from passage of Biden’s plan to do a lot more of both.

The case for IRS reform is spelled out in a good piece by New York University tax expert Chye-Ching Huang. A decade’s worth of IRS budget cuts have cost taxpayers trillions of dollars:

The agency is increasingly unable to detect or address blatant tax cheating by high-income filers and the largest businesses. In February, the I.R.S. commissioner, Charles P. Rettig, told Congress that about $570 billion in taxes owed in 2019 were not paid. That tax gap is projected to total about $7.5 trillion over this decade.

As Huang reports, the agency is so depleted that it often doesn’t follow up on tax-dodging by high-income people that it knows about, and big corporations and the wealthy are extremely skilled at using legal complexities to frustrate audits and evade taxes.

This also would provide a weapon against deficit-scolding going forward. Republicans are betting on voters getting checks and vaccines and enjoying the recovery — and over time forgetting how that all happened, after which Republicans will point to deficits and scream that Democratic profligacy is destroying the country.

“If Republicans are truly concerned about rising deficits, it should be a no-brainer to collect taxes that are owed from people and companies that are cheating the system,” Seth Hanlon, a tax expert at the Center for American Progress, tells me. “You can do this without raising rates.”. . .

By tackling the ways elites game the system with impunity — exactly the sort of thing right-wing populists demagogue to turn people against liberal governance — beefing up tax enforcement could bolster faith in the general project of paying taxes to secure public goods and solutions to large public problems.

The Shutdown Won't Last For Months - And Here's Why

On Friday, Donald Trump doubled down on his refusal to open the portion of the government that has been shut down. He said if he doesn't get $5 billion to start building his wall between the United States and Mexico, the shutdown could continue for months and even years. He was trying to look tough, but all it did was make him look stupid. He has obviously not considered the reality of how the shutdown is going to affect Americans.

Much has been reported about the 800,000 government workers who will not be paid during the shutdown. That could be tragic for those families if the shutdown lasts just a few more weeks. And since the Agriculture Department is one of the departments that is shut down, millions of poor Americans could see their SNAP benefits (food stamps) stop (that money will run out in early March).

But there is something else that will put enormous pressure on the White House. The Internal Revenue Service (IRS) is also part of the government that is shut down -- and 90% of IRS workers have been furloughed. How will that affect Americans?

Employers will still be required to send out tax forms to their employees by the end of January, and people will still be required to pay their taxes by April 15th. Those dates are written into law, and won't change.

But the time it takes to get a refund is not written into law -- and with most employees on furlough, the IRS will not be able to process and return tax refunds to Americans. This will affect about 80% of taxpayers who are expecting a refund. According to the IRS, 110,806,000 refunds were made in 2018 ($312,973 billion).

We are talking about many millions of taxpayers/families, and they are not going to be happy about their tax refund being delayed because Trump wants a wall. If Trump thinks he's being pressured right now, just wait until the tax refunds start being delayed (refunds that many people need to keep their financial heads above water).

Does Trump (and his Republican associates) really want to be blamed for millions of voters not getting their tax refunds in a timely manner? Being blamed for that (and they would be blamed since Democrats have already passed a funding bill) is not going to help them in the next election. The easiest way to anger a voter is to mess with their finances, and that's what delaying tax refunds would do. I suspect even many of Trump's supporters will be angered by that.

Will the shutdown last for months? Not a chance. The pressure to fund government will be overwhelming as we get into tax refund season (which starts in early February).

GOP Guts The IRS To Help The Rich Get Even More

(Cartoon image is by Arend van Dam at cagle.com.)

If there's one thing the Republicans want to do, it's make rich people even richer. About a year ago, they gave the rich huge tax cuts, while giving other Americans next to nothing. That would have been bad enough, but it's not all they did to advantage the rich. They have also gutted the IRS by drastically cutting its funding, making it much easier for the rich to cheat on their taxes.

Here's how the editorial board of The New York Times puts it:

Let’s take a moment to pity the Internal Revenue Service. Yes, to many Americans, it’s a money-grabbing ogre siphoning hard-earned cash to the faceless federal bureaucracy.

But the nation’s tax collector today is an enfeebled enforcer. Its budget has been bled dry by a Republican Congress in service to wealthy donors and businesses aggressively pursuing tax avoidance, leaving uncollected 18 percent to 20 percent of potential tax revenues annually. That’s the conclusion in articles by the journalism site ProPublica, co-published by The Atlantic and The Times.

Loopholes are beyond the means of most Americans who earn salaries or are paid hourly wages, and are exploited by those who derive significant income from investments or business revenue. Although we’d all like to pay less, relative to most developed nations our tax burden is a pretty good deal.

It’s an even better deal for the richest Americans, who have benefited the most from President Trump’s tax cuts. The rich are different: They’re more likely to cheat, according to one study of I.R.S. data. And the I.R.S. has about as many auditors now as it did 60 years ago, when there were half as many Americans. The undermining of the I.R.S.’s enforcement capability coincides nicely with the Republican playbook: Enrich wealthy individuals and corporations with tax giveaways that balloon the deficit, justifying spending cuts for health care, education and infrastructure, then amplify the process by not holding high-end taxpayers accountable for the amounts they owe.

Dodging taxes is as old as taxes themselves. Just ask Mr. Trump, who has employed systematic dodging for decades, according to a Times investigation. 

We got a good look at one of the bigger problems, the proclivity of the wealthy to hide cash from the I.R.S., in 2008, when the Justice Department was able to pierce the Swiss bank secrecy veil during an investigation of UBS. The department uncovered thousands of rich Americans who were hiding about $18 billion in offshore accounts arranged by that Swiss bank. Many were compelled to fess up and pay up. But eight years later, the Panama Papers, millions of files hacked from a Panamanian law firm that specialized in caching money for the rich and powerful, disclosed that there were still plenty of rich people willing to play hide-and-seek with the I.R.S.

The odds are in their favor, and growing. ProPublica reported that I.R.S. audits dropped 42 percent from 2010 to 2017, a period in which the I.R.S. budget was lopped by $2.5 billion, adjusted for inflation. New investigations of people who don’t file dropped to 362,000 last year, from 2.4 million in 2011. That costs the Treasury $3 billion annually in uncollected taxes. More than $8 billion in back taxes did not get collected in 2017 because the agency couldn’t get to them before the 10-year statute of limitations ran out, another worsening problem. Tax delinquents can simply wait the agency out. ProPublica estimated the total shortfall of uncollected funds since 2011 at $95 billion.

These uncollected billions could pay for any number of things: better care of wounded veterans, infrastructure improvements such as a desperately needed new tunnel between New York and New Jersey. You could even build an expensive wall.

One area where the I.R.S. still bares its teeth is in auditing people in the lowest tax bracket. If you are claiming the earned-income tax credit, which provides cash for people who typically earn less than $20,000 annually, you are as likely to be audited as someone earning between $500,000 and $1 million. ProPublica reported that 36 percent of all I.R.S. audits focused on this group. It may not be a crime to be poor in the G.O.P.’s America, but you can expect to be treated like a criminal for accepting the government’s cash to make ends meet. At best, that’s an inefficient use of I.R.S. agents: Compliance should apply to all, but the I.R.S. should do most of its fishing where the big fish are.

The Trump/G.O.P. tax policy is now operating at peak failure. The tax cuts have failed to increase gross domestic product beyond the “sugar high” stimulus they gave to an economy already heading toward record low unemployment. The economy seems to be slowing, making a mockery of the promise of strong growth that was used to peddle the tax cuts. 

The stock market is shuddering at the idea of a slowdown, which corporations contributed to by using their tax windfall to buy back more than $1 trillion of their own stock. They have, to this point, immolated capital instead of using it for additional hiring, increased wages or further business investments.

A CNBC poll found that millionaires are still sanguine about the economy. They can well afford to be. If their stocks lose value, they can take a write-off. If stocks rise, their maximum long-term capital gains tax is only 20 percent. Most American households don’t own stocks — or no longer own them, having been forced to liquidate stock holdings in the Great Recession, which was precipitated by a collapse in the housing market. Thus the wealth gap grows, reaching levels not seen since the Roaring Twenties.

To pay for the millionaire tax cuts, sacrifices had to be made. So Congress limited deductions for state and local taxes to $10,000 annually. While that generally applies to well-to-do people who can itemize their tax returns, it was also a clear shot against blue states such as California and New York that have relatively high state and local taxes. But reducing these deductions, along with higher interest rates, punished the housing market, which is stagnant nationally and in a free fall in the Northeast.

Our ability to keep the $1 trillion deficit created by the Trump tax cuts from deepening depends in part on collecting taxes to which the government is legally entitled. 

Think of it this way: To protect our nation, we have the most powerful army in the world. To protect our tax base, we have an army on the order of Liechtenstein’s. 

The lack of deterrence will only encourage more cheating. The I.R.S. needs to be capable of doing the job for which it was created — from answering taxpayers’ questions to chasing down the richest cheats, even if they occupy the Oval Office.