Chelsea Green Publishing

Chelsea Green Blog

The size of illegal tax shelters vs. taxes and wages paid

One of the most shocking tidbits in Robert Kuttner’s new Obama’s Challenge has to do with where Obama could come up with the money to pay for the programs Kuttner recommends. Nearly half the money Obama would need—at least $300 billion—could come from having the IRS crack down on illegal “tax shelters” that are used nearly exclusively by the richest sliver of the American population. In Kuttner’s words, “the consensus among tax experts is that at least $300 billion of taxes owed by the richest Americans go uncollected mainly because IRS enforcement resources have been diverted from audits of tax shelters used only by the wealthy onto audits of working Americans.” (Obama’s Challenge, p. 29; Kuttner cites this report as his source.) This is due largely to the fact that, under President Bush, the IRS has focused its enforcement efforts on “the little guy,” auditing lower-income tax payers and largely ignoring the creative accounting that allows the richest of the rich to avoid paying their fair share. (And that’s on top of the fact that Bush’s tax cuts already give the richest among us a legal free pass to avoid paying a truly fair share.) (See this and this and this.) $300 billion in illegal tax shelters being ignored by the IRS! You might wonder, as I did, just how much money is $300 billion? How does it measure up relative to how large our overall economy is? Well, it is 25 times more than all the Federal income taxes paid by families making less than $100,000 (adjusted gross income) in Ohio in 2006. From another angle, it is 25 times more than all the Federal income taxes paid by the 3.5 million non-richest Ohio families in 2006. (Source: IRS, “Tax Year 2006: Historical Table 2 (SOI Bulletin)–Ohio,” [Excel file] found here.) It is 50% more than all of the wages paid to all employees in all occupations in Ohio in 2007 (excluding self-employed). (Source: Bureau of Labor Statistics, Occupational Employment Statistics, “May 2007 State Occupational Employment and Wage Estimates Ohio.” It is only slightly less than all wages paid to all workers in the construction industry—throughout the entire United States—in 2007. (Source: Bureau of Labor Statistics, Occupational Employment Statistics, “May 2007 National Industry-Specific Occupational Employment and Wage Estimates: Sector 23 – Construction.” So next time someone says—or next time you are tempted to say—“we can’t possibly afford any new government programs,” keep this in mind. If the IRS would only crack down on illegal tax shelters used by the crème de la crème of tax cheats, we’d be sitting one heck of a lot prettier than we have been trained to believe. [Photo courtesy of le Korrigan]


The Future Is Hopeless, So Give it Your All

The never-ending national election in the United States, the “surprise” pro-Brexit vote in the United Kingdom, climate change … the list goes on and on about how easy it can be to lose hope in the future.Like many of life’s frustrations, or overwhelmingly large topics, most people in our society find themselves somewhere on the […] Read More

Climate Change & the End of Stationarity

Just as predicting the rise of Donald Trump as a leading presidential candidate stumped even the best of political analysts (looking at you Nate “FiveThirtyEight” Silver), the advent of the Sixth Great Extinction due to climate change and an increasingly potent mix of carbon dioxide in the atmosphere has completely upended how we predict the […] Read More

Use Simple Games to Better Understand Climate Change

How is it that emissions keep growing despite rising concern about the climate change they cause? It is possible to identify several reasons for the paradox, most of which lie outside the scope of The Climate Change Playbook. But one important reason is relevant here: people do not understand the behaviors of the climate system.And […] Read More

Author Petra Kuenkel: The Art of Leading Collectively

More than ever before, there is a focus on new, collective forms of leadership—and an urgency to get collective change processes underway, all over the world. What’s behind the recent push to move collective leadership to the fore? Whether we find ourselves in societal or organizational change, it requires collective energy and drive to bring […] Read More

Author David Stroh: First Steps to Becoming a Systems Thinker

Systems thinking is often seen as something relegated to scientific and business analysis – economics, resource depletion, and climate. However, Systems Thinking for Social Change focuses on how to use systems thinking to make breakthrough progress on intransigent social problems. We asked author David Stroh how this approach can make an impact, and how readers […] Read More
Follow us
Get every new post delivered to your inbox
Join millions of other followers
Powered By WPFruits.com