They’re Going to Need All Those IRS Agents
Reason #439 to own gold and silver!
Today we post without (much) commentary, excerpts of recent remarks by Treasury secretary Janel Yellen about the Internal Revenue Service. Much of what Yellen said at the 9/15/22 event at the IRS facility in New Carrolton, MD, is simply wrong, but we feel you should see them for yourself:
As our nation’s revenue collection agency, the IRS is a foundation of our government and society. The IRS collects 96% of the revenue that funds the federal government – supporting our priorities from national security to infrastructure to social security. It also is one of the very few parts of the federal government that touches nearly every American household….
Well, now. We can’t resist denying the IRS is a foundation of our government and society. Because words mean things, we point out that foundation means something there from the beginning upon which everything else is built or rests, like the foundation of a building. But the Internal Revenue bureau was a civil war creation of Abraham Lincoln in 1862, while the 16th Amendment, the income tax amendment, wasn’t appended to the Constitution until 1913.
On one day last year – March 15 – the IRS received 8.6 million phone calls….
The world has become more complex. Enforcing tax laws is not as simple as it was a few decades ago. Average tax returns for large corporations now reach 6,000 pages. And more complicated partnerships have skyrocketed from less than 5% of total income in 1990 to over a third today.
As a result, the tax gap – the amount of unpaid taxes – has grown to enormous levels. It’s estimated at $7 trillion over the next decade. And since the IRS has lacked the resources to effectively audit high earners – whose audits are more complex and take more time – these high earners are responsible for a disproportionate share of unpaid taxes.
To illustrate: In 2019, the top one percent of Americans was estimated to owe over a fifth of unpaid taxes – totaling around $160 billion. Data shows that less than half of all taxes from more complex sources of income are paid. Yet nearly all taxes due from wages and salaries – which are earned by ordinary Americans – are paid.
In sum, high earners are paying far less than they owe. This means that working families are shouldering a disproportionate burden….
This inequity is unacceptable. As leaders and employees at the IRS have warned for years now, enforcement of the law is not only a means to raise revenue. It is also a matter of fundamental fairness….
Statists always use appeals to fairness to gobble up more statist territory. For example, inflation has historically shifted lower-income taxpayers into tax brackets that were originally enacted to “get the rich.” Similarly, Americans are plagued with paperwork and bureaucracy that was enacted as a means to “get the drug dealers.” But they really burden the people with paperwork and increase state surveillance, while the drug dealers go about dealing their wares. Indeed, despite decades of proliferating regulations and laws, last year saw more drug deaths among Americans than any other year in history.
Last week, I gave an economic speech discussing how our administration’s plan will create a stronger, more resilient economy with greater fairness for all. I believe that adequately funding the IRS is core to our success. It raises the revenue for us to make important investments in our economic strength. It makes sure that all Americans are playing by the same rules. It avoids misallocation of resources in the economy at large. And it does so by deterring taxpayers from shifting their activities toward more opaque sources or engaging in tax evasion.
And finally, having word-searched Yellen’s speech, except of the badly misnamed “Inflation Reduction Act,” the Treasury secretary didn’t utter a word about inflation, which is an un-debated, un-enacted, and un-legislated (and therefore illegal) tax on the people. If Yellen wishes to go on at length about unfair taxation, maybe she should mention that.
But then, Yellen admitted recently that she didn’t really understand inflation. Which, in the current circumstances especially, should be grounds to ask for her resignation.
So, there you have it. The growth of the IRS and its 87,000 additional armed agents is reason #439 to own gold and silver.