The top one percent of wealthy Americans owe more than one-fifth of all unpaid taxes (1 Viewer)

[JAA]

ABC News article

Im hoping this is considered a non-political post. Im also hoping we can focus on taxes and not politics. If not, feel free to close this post.

I was surprised by the this line in the article:

The top one percent of wealthy Americans owed more than one-fifth of all unpaid taxes

Do folks believe this? I find it hard to believe for the simple fact of what it means for it to be true. If it is true, it means the basic tax-paying American is really getting screwed here. If its true I would be all for super-duper hard penalties for tax evasion. I would also be for giving the IRS whatever they needed to do the right thing and get all tax owers back on track.

Im just astounded if this is true.

 

[dgreen]

I haven't read the article, but a couple questions I'd have are...

1) What's the value of these unpaid taxes and how much would we expect to be allocated to the top 1% (it seems 1/5th is considered to be way too high)?
2) How often are "unpaid taxes" never paid? In other words, can "unpaid taxes" also be considered "taxes that will likely be paid later" and it's a matter of timing?

 

[El Floppo]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

 

[AAABatteries]

I’m shocked you are surprised by this.

 

[TheAristocrat]

I'll try News Stories That Appear Every Year for $100, Alex.

 

[Gally]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

It's different to find ways to legally not pay taxes and owe taxes that are illegally being evaded. I am not sure which type the article is referring to.

 

[IvanKaramazov]

ABC News article

Im hoping this is considered a non-political post. Im also hoping we can focus on taxes and not politics. If not, feel free to close this post.

I was surprised by the this line in the article:

The top one percent of wealthy Americans owed more than one-fifth of all unpaid taxes

Do folks believe this? I find it hard to believe for the simple fact of what it means for it to be true. If it is true, it means the basic tax-paying American is really getting screwed here. If its true I would be all for super-duper hard penalties for tax evasion. I would also be for giving the IRS whatever they needed to do the right thing and get all tax owers back on track.

Im just astounded if this is true.

Sure. It's mathematically impossible for broke people to owe much in the way of back taxes. You have to figure that the people with the most income/wealth are the ones who account for most of the unpaid taxes, dollar wise.

If a guy who makes $50K skims 10% off his tax bill, and a guy who makes $800K skims 10% off his tax bill, those are going to be wildly different dollar amounts.

 

[Stoneworker]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

Cheating on taxes is not an exclusive province of the rich

- According to the IRS, individual taxpayers do 75% of the cheating—mostly middle-income earners.

- Cash-intensive businesses and service industry workers, from handypeople to doctors, are the worst offenders.

- For example, the IRS claims that waiters and waitresses underreport their cash tips by an average of 84%.

Negligence Versus Tax Fraud: How the IRS Tells the Difference

The difference between cheating on your taxes and negligently filing them, and how the IRS distinguishes between the two.

www.nolo.com

 

[JAA]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

 

[JAA]

I'll try News Stories That Appear Every Year for $100, Alex.

Ive never seen this before. Can you share any in previous years? Just one plz

 

[JAA]

ABC News article

Im hoping this is considered a non-political post. Im also hoping we can focus on taxes and not politics. If not, feel free to close this post.

I was surprised by the this line in the article:

The top one percent of wealthy Americans owed more than one-fifth of all unpaid taxes

Do folks believe this? I find it hard to believe for the simple fact of what it means for it to be true. If it is true, it means the basic tax-paying American is really getting screwed here. If its true I would be all for super-duper hard penalties for tax evasion. I would also be for giving the IRS whatever they needed to do the right thing and get all tax owers back on track.

Im just astounded if this is true.

Sure. It's mathematically impossible for broke people to owe much in the way of back taxes. You have to figure that the people with the most income/wealth are the ones who account for most of the unpaid taxes, dollar wise.

If a guy who makes $50K skims 10% off his tax bill, and a guy who makes $800K skims 10% off his tax bill, those are going to be wildly different dollar amounts.

But there are so many more 50k tax payers vs 800k ones. I dont think your math holds.

 

[IvanKaramazov]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

 

[JAA]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

Again, this is about total taxes. This is about unpaid taxes.

Please read the article.

 

[El Floppo]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

I didn't read the article,but I'm also reading "unpaid" as not necessarily cheating per se- but contesting or still finding ways to not pay them.

 

[El Floppo]

Ie..the rest of us don't have Dewey, Cheatum & Howe esq. working around the clock to fend off the IRS.

 

[Leroy Hoard]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

I didn't read the article,but I'm also reading "unpaid" as not necessarily cheating per se- but contesting or still finding ways to not pay them.

So hiring the best tax attorneys to delay payment?

 

[matttyl]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

More to the specific point here. The top 1% pays about 45% of the total federal income taxes. So if they only account for 20% of the unpaid taxes, they disproportionately pay more of their share than the other 99%.

 

[JAA]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

More to the specific point here. The top 1% pays about 45% of the total federal income taxes. So if they only account t for 20% of the unpaid taxes, they disproportionately pay more of their share than the other 99%.

Can you share where you get the 45% number?

 

[matttyl]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

More to the specific point here. The top 1% pays about 45% of the total federal income taxes. So if they only account t for 20% of the unpaid taxes, they disproportionately pay more of their share than the other 99%.

Can you share where you get the 45% number?

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

 

[El Floppo]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

I didn't read the article,but I'm also reading "unpaid" as not necessarily cheating per se- but contesting or still finding ways to not pay them.

So hiring the best tax attorneys to delay payment?

Delay until they figure how to avoid payment.

 

[JAA]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

More to the specific point here. The top 1% pays about 45% of the total federal income taxes. So if they only account t for 20% of the unpaid taxes, they disproportionately pay more of their share than the other 99%.

Can you share where you get the 45% number?

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

Thank you for this. Do you have an additional source, not from The Tax Foundation? I would just like to corroborate.

 

[matttyl]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

More to the specific point here. The top 1% pays about 45% of the total federal income taxes. So if they only account t for 20% of the unpaid taxes, they disproportionately pay more of their share than the other 99%.

Can you share where you get the 45% number?

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

Thank you for this. Do you have an additional source, not from The Tax Foundation? I would just like to corroborate.

Who pays the most income tax? | USAFacts

Individual income taxes made up 49% of federal revenue in FY 2024.

usafacts.org

Listed source for them is the IRS. It’s a number I see quite a lot, I think it’s pretty accurate.

 

[Cowboysfan8]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

Cheating on taxes is not an exclusive province of the rich

- According to the IRS, individual taxpayers do 75% of the cheating—mostly middle-income earners.

- Cash-intensive businesses and service industry workers, from handypeople to doctors, are the worst offenders.

- For example, the IRS claims that waiters and waitresses underreport their cash tips by an average of 84%.

Negligence Versus Tax Fraud: How the IRS Tells the Difference

The difference between cheating on your taxes and negligently filing them, and how the IRS distinguishes between the two.

www.nolo.com

Sure

But most servers are using that extra cash to buy groceries and rent. Not yachts and Maseratis

 

[Zow]

Definitely easy to believe for a few reasons:*

1. Many wealthy people have good reasons for filing extensions.
2. For many, the tax penalties are worth it as the money owed is invested elsewhere generating a greater ROI.
3. Rich people think they're untouchable.


*I didn't read the full article but I'm assuming "unpaid" includes extensions, people incurring penalties and know it, etc.

 

[TheAristocrat]

I'll try News Stories That Appear Every Year for $100, Alex.

Ive never seen this before. Can you share any in previous years? Just one plz

Just one? Nah, you seem like the type that needs to be driven to work/school so I'll give you a few for the ride home.

2023 (NPR): https://www.npr.org/2023/10/13/1205663467/income-tax-gap-keep-growing

2022 (NPR): https://www.npr.org/2022/08/14/1117...s-dodgers-inflation-reduction-act-enforcement

2021 (NYTimes): https://www.nytimes.com/2021/09/08/business/irs-tax-avoidance.html

2020 (whatever TruthOut is): https://truthout.org/articles/sande...sponsible-for-70-percent-of-all-unpaid-taxes/

This isn't new. It might be new to you but it isn't remotely new. If I wanted to read microfiche for an afternoon, I'm sure I could find references in the 1970s to the same types of stories.

ETA: Please note that the articles also come out around the same time every year. I'll blow your mind when I tell you that shark attack stories are the July/August story of the month.

 

[matttyl]

Definitely easy to believe for a few reasons:*

1. Many wealthy people have good reasons for filing extensions.
2. For many, the tax penalties are worth it as the money owed is invested elsewhere generating a greater ROI.
3. Rich people think they're untouchable.


*I didn't read the full article but I'm assuming "unpaid" includes extensions, people incurring penalties and know it, etc.

#4 - likely the biggest reason, for most folks (like I would imagine the bulk of us here) - our incomes are directly reported to the IRS. We can’t hide it. They see their copy of the W2 that our employer creates and files or 1099 that our invest accounts create. The rich have income streams that aren’t just W2 or 1099.

 

[IvanKaramazov]

Definitely easy to believe for a few reasons:*

1. Many wealthy people have good reasons for filing extensions.
2. For many, the tax penalties are worth it as the money owed is invested elsewhere generating a greater ROI.
3. Rich people think they're untouchable.


*I didn't read the full article but I'm assuming "unpaid" includes extensions, people incurring penalties and know it, etc.

#4 - likely the biggest reason, for most folks (like I would imagine the bulk of us here) - our incomes are directly reported to the IRS. We can’t hide it. They see their copy of the W2 that our employer creates and files or 1099 that our invest accounts create. The rich have income streams that aren’t just W2 or 1099.

I have a hard time even imaging how to successfully cheat on my taxes for exactly this reason. Every dime of income I earn is reported to the IRS. Admittedly, I am not a criminal mastermind, but most people like me ought to be able to just auto-file.

 

[matttyl]

Definitely easy to believe for a few reasons:*

1. Many wealthy people have good reasons for filing extensions.
2. For many, the tax penalties are worth it as the money owed is invested elsewhere generating a greater ROI.
3. Rich people think they're untouchable.


*I didn't read the full article but I'm assuming "unpaid" includes extensions, people incurring penalties and know it, etc.

#4 - likely the biggest reason, for most folks (like I would imagine the bulk of us here) - our incomes are directly reported to the IRS. We can’t hide it. They see their copy of the W2 that our employer creates and files or 1099 that our invest accounts create. The rich have income streams that aren’t just W2 or 1099.

I have a hard time even imaging how to successfully cheat on my taxes for exactly this reason. Every dime of income I earn is reported to the IRS. Admittedly, I am not a criminal mastermind, but most people like me ought to be able to just auto-file.

Most do, or something really close to it.

 

[Zow]

Definitely easy to believe for a few reasons:*

1. Many wealthy people have good reasons for filing extensions.
2. For many, the tax penalties are worth it as the money owed is invested elsewhere generating a greater ROI.
3. Rich people think they're untouchable.


*I didn't read the full article but I'm assuming "unpaid" includes extensions, people incurring penalties and know it, etc.

#4 - likely the biggest reason, for most folks (like I would imagine the bulk of us here) - our incomes are directly reported to the IRS. We can’t hide it. They see their copy of the W2 that our employer creates and files or 1099 that our invest accounts create. The rich have income streams that aren’t just W2 or 1099.

Right - that would fall into my #1.

 

[Brunell4MVP]

I'll try News Stories That Appear Every Year for $100, Alex.

Ive never seen this before. Can you share any in previous years? Just one plz

Just one? Nah, you seem like the type that needs to be driven to work/school so I'll give you a few for the ride home.

2023 (NPR): https://www.npr.org/2023/10/13/1205663467/income-tax-gap-keep-growing

2022 (NPR): https://www.npr.org/2022/08/14/1117...s-dodgers-inflation-reduction-act-enforcement

2021 (NYTimes): https://www.nytimes.com/2021/09/08/business/irs-tax-avoidance.html

2020 (whatever TruthOut is): https://truthout.org/articles/sande...sponsible-for-70-percent-of-all-unpaid-taxes/

This isn't new. It might be new to you but it isn't remotely new. If I wanted to read microfiche for an afternoon, I'm sure I could find references in the 1970s to the same types of stories.

ETA: Please note that the articles also come out around the same time every year. I'll blow your mind when I tell you that shark attack stories are the July/August story of the month.

I'll take what news do we see in an election year for $100, Alex.

 

[Sand]

Definitely easy to believe for a few reasons:*

1. Many wealthy people have good reasons for filing extensions.
2. For many, the tax penalties are worth it as the money owed is invested elsewhere generating a greater ROI.
3. Rich people think they're untouchable.


*I didn't read the full article but I'm assuming "unpaid" includes extensions, people incurring penalties and know it, etc.

If this includes late filers I can certainly see how this would impact richer folks as their taxes can be a lot more complex. Filing an extension isn't a rare thing and neither is misestimating how much one one will owe. I wonder if these numbers are truly known numbers or if the IRS is estimating unpaid taxes here. I don't necessarily trust estimates like this.

That said, it blew me away when the IRS started cracking down and went after non-filers who make 400k+. I mean, jeez, guys at the IRS - wouldn't this be the easiest of pickings to go after these folks? If they know of these folks why aren't they prime targets? Non-filer letters are easy to send out. That said I have no sympathy at all for these ~100k folks who earn a boatload and simply don't file. That's ridiculous.

https://www.cnbc.com/2024/02/29/irs-targets-wealthy-non-filers-with-new-wave-of-compliance-letters.html

 

[kupcho1]

Sure. It's mathematically impossible for broke people to owe much in the way of back taxes. You have to figure that the people with the most income/wealth are the ones who account for most of the unpaid taxes, dollar wise.

Gets it.

 

[GreenNGold]

They also pay a higher percentage of the overall taxes (I'm not interested in debating what the appropriate amount should be), so it makes sense they would have a higher share of the unpaid taxes too

 

[Mitchie]

Reason I find it surprising is that I would hope that the top 1% are having their taxes audited whereas that's not necessarily the case for lower income folks

 

[the moops]

I would have guessed it would have been much higher. Like over 50%

 

[jvdesigns2002]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

I’m surprised that it’s not more than 20%. A lot of citizens of average wealth just have their taxes deducted each paycheck. The super wealthy literally hire wealth management firms, CPA’s and people that specialize in finding creative ways to pay the least amount of taxes. Even the IRS will sometimes avoid going after the super wealthy because they know that they will be dealing with a plethora of CPA’s, lawyers, and wealth firms that will fight them along every step of the way.

 

[JAA]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

More to the specific point here. The top 1% pays about 45% of the total federal income taxes. So if they only account t for 20% of the unpaid taxes, they disproportionately pay more of their share than the other 99%.

Can you share where you get the 45% number?

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

Thank you for this. Do you have an additional source, not from The Tax Foundation? I would just like to corroborate.

Who pays the most income tax? | USAFacts

Individual income taxes made up 49% of federal revenue in FY 2024.

usafacts.org

Listed source for them is the IRS. It’s a number I see quite a lot, I think it’s pretty accurate.

Just wanted to say thank you for the second source

 

[JAA]

I'll try News Stories That Appear Every Year for $100, Alex.

Ive never seen this before. Can you share any in previous years? Just one plz

Just one? Nah, you seem like the type that needs to be driven to work/school so I'll give you a few for the ride home.

2023 (NPR): https://www.npr.org/2023/10/13/1205663467/income-tax-gap-keep-growing

2022 (NPR): https://www.npr.org/2022/08/14/1117...s-dodgers-inflation-reduction-act-enforcement

2021 (NYTimes): https://www.nytimes.com/2021/09/08/business/irs-tax-avoidance.html

2020 (whatever TruthOut is): https://truthout.org/articles/sande...sponsible-for-70-percent-of-all-unpaid-taxes/

This isn't new. It might be new to you but it isn't remotely new. If I wanted to read microfiche for an afternoon, I'm sure I could find references in the 1970s to the same types of stories.

ETA: Please note that the articles also come out around the same time every year. I'll blow your mind when I tell you that shark attack stories are the July/August story of the month.

Thank you for taking the time to put this together

 

[rockaction]

needs to be driven to work/school so I'll give you a few for the ride home.

They need to bring back sigs.

“rockaction needs to be driven to work/school, so if you wouldn’t mind sparing a few for the ride home."

 

[JAA]

I'll try News Stories That Appear Every Year for $100, Alex.

Ive never seen this before. Can you share any in previous years? Just one plz

Just one? Nah, you seem like the type that needs to be driven to work/school so I'll give you a few for the ride home.

2023 (NPR): https://www.npr.org/2023/10/13/1205663467/income-tax-gap-keep-growing

2022 (NPR): https://www.npr.org/2022/08/14/1117...s-dodgers-inflation-reduction-act-enforcement

2021 (NYTimes): https://www.nytimes.com/2021/09/08/business/irs-tax-avoidance.html

2020 (whatever TruthOut is): https://truthout.org/articles/sande...sponsible-for-70-percent-of-all-unpaid-taxes/

This isn't new. It might be new to you but it isn't remotely new. If I wanted to read microfiche for an afternoon, I'm sure I could find references in the 1970s to the same types of stories.

ETA: Please note that the articles also come out around the same time every year. I'll blow your mind when I tell you that shark attack stories are the July/August story of the month.

I read through these articles. Based on what I have seen the largest % of unpaid was in 2020 when the percentage was 70%. The percentage now is down to 20%. Is that what you are seeing?

Same with audit percentages. Very low audit %'s for $1m+ earners. Those %'s are going up also.

 

[matttyl]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

More to the specific point here. The top 1% pays about 45% of the total federal income taxes. So if they only account t for 20% of the unpaid taxes, they disproportionately pay more of their share than the other 99%.

Can you share where you get the 45% number?

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

Thank you for this. Do you have an additional source, not from The Tax Foundation? I would just like to corroborate.

Who pays the most income tax? | USAFacts

Individual income taxes made up 49% of federal revenue in FY 2024.

usafacts.org

Listed source for them is the IRS. It’s a number I see quite a lot, I think it’s pretty accurate.

Just wanted to say thank you for the second source

No problem. It’s a pretty shocking number to see, till you think about it and realize that the top 1% holds that kind of wealth. Now, for the most part our tax system taxes income rather than wealth, so I’m not sure if that number is “fair” or not.

 

[JAA]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

More to the specific point here. The top 1% pays about 45% of the total federal income taxes. So if they only account t for 20% of the unpaid taxes, they disproportionately pay more of their share than the other 99%.

Can you share where you get the 45% number?

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

Thank you for this. Do you have an additional source, not from The Tax Foundation? I would just like to corroborate.

Who pays the most income tax? | USAFacts

Individual income taxes made up 49% of federal revenue in FY 2024.

usafacts.org

Listed source for them is the IRS. It’s a number I see quite a lot, I think it’s pretty accurate.

Just wanted to say thank you for the second source

No problem. It’s a pretty shocking number to see, till you think about it and realize that the top 1% holds that kind of wealth. Now, for the most part our tax system taxes income rather than wealth, so I’m not sure if that number is “fair” or not.

Love that point ... we tax income and not wealth.

 

[matttyl]

You're astounded that the upper tier of rich people are finding ways to not pay their taxes?

No

Im surprised at the toal % of un-paid for the upper tier.

According to Wikipedia, the top 1% holds about 31% of the total wealth in the US. So if they account for only 20% of unpaid taxes, that means that this slice of the population is disproportionately tax compliant.

And that makes sense. Very wealthy people probably don't commit a ton of crime for a variety of reasons, and they have the means to find legal ways to minimize their tax bill without needing to cheat. They don't do a lot of transactions in cash, and they don't have a lot of opportunities for off-the-books work (like an electrician might be able to do, for example). We should probably expect to see less tax fraud among very wealthy people, but when they do commit fraud, it's for a lot of money.

More to the specific point here. The top 1% pays about 45% of the total federal income taxes. So if they only account t for 20% of the unpaid taxes, they disproportionately pay more of their share than the other 99%.

Can you share where you get the 45% number?

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

Thank you for this. Do you have an additional source, not from The Tax Foundation? I would just like to corroborate.

Who pays the most income tax? | USAFacts

Individual income taxes made up 49% of federal revenue in FY 2024.

usafacts.org

Listed source for them is the IRS. It’s a number I see quite a lot, I think it’s pretty accurate.

Just wanted to say thank you for the second source

No problem. It’s a pretty shocking number to see, till you think about it and realize that the top 1% holds that kind of wealth. Now, for the most part our tax system taxes income rather than wealth, so I’m not sure if that number is “fair” or not.

Love that point ... we tax income and not wealth.

So to that point, is the 1% being discussed in these articles the top 1% of income earners, or the top 1% in actual wealth (though I’d imagine those overlap pretty well).

 

[Redwes25]

ABC News article

Im hoping this is considered a non-political post. Im also hoping we can focus on taxes and not politics. If not, feel free to close this post.

I was surprised by the this line in the article:

The top one percent of wealthy Americans owed more than one-fifth of all unpaid taxes

Do folks believe this? I find it hard to believe for the simple fact of what it means for it to be true. If it is true, it means the basic tax-paying American is really getting screwed here. If its true I would be all for super-duper hard penalties for tax evasion. I would also be for giving the IRS whatever they needed to do the right thing and get all tax owers back on track.

Im just astounded if this is true.

Not surprised at all since top 1 percent pay about 40 percent of all collected income taxes.

ETA - seems like I was beaten to the punch on this comment and my estimate was wrong and pay a higher amount

 

[IvanKaramazov]

So to that point, is the 1% being discussed in these articles the top 1% of income earners, or the top 1% in actual wealth (though I’d imagine those overlap pretty well).

I remember seeing a simulation one time that illustrated how saving and aging drives these statistics even if there were no inequality at all in the sense that we understand it. I don't remember the details, but it was essentially "Imagine that every single person in the economy earns the exact same income, saves exactly the same amount with the same rate of return, works from 25 to 65, and dies at 90." The result is that the wealthiest 10% or so of the population owns some seemingly-ridiculous amount of wealth just due to compound interest.

Obviously that doesn't tell the whole story of the wealth distribution in the US, but it's worth keeping in mind as a baseline.