Over the past year or so, I've pointed out one of the reasons Greece is going down the drain is because of their massive tax evasion problem. Depending on what reports one reads, Greece is losing $36-$100 Billion dollars in tax revenue per year.
Last week, Mr. Inskeep on NPR blew it-- he was interviewing Senator Levin who clearly stated something needed to be done regarding "tax avoidance schemes" in our nation, and of course Inskeep didn't bother asking the Senator how much revenue are we losing due to these scams:
It's $1.1 Trillion dollars per year.
From today's NY Times:
The budget fight in Washington, which entered a new round last week as Senate Democrats and House Republicans introduced dueling plans, is usually cast as a contest between raising taxes and cutting spending. In fact, the taxes-versus-spending distinction is largely meaningless.Obviously these subsidies have grown into a Frankenstein monster. When our economy was growing and our people "fully" employed, the monster could be (sort of) ignored. But that's over, the revenue pie significantly shrank, and now the monster has to be dealt with.
Each year, the government doles out tax breaks worth $1.1 trillion. That is more than the cost of Medicare and Medicaid combined. It is more than Social Security. It tops the defense budget, and it tops the budget for nondefense discretionary programs, which include most everything else.
Tax breaks work like spending. Giving a deduction for certain activities, like homeownership or retirement savings, is the same as writing a government check to subsidize those activities. Functionally, they mimic entitlements. Like Medicare, Medicaid and Social Security, they are available, year in and year out, in full, to all who qualify. Yet in budget talks, Republicans ignore tax entitlements, which flow mostly to high-income taxpayers, while pushing to cut Medicare, Medicaid and Social Security.
President Obama and Congressional Democrats have rightly asserted that tax breaks are ripe for cuts that could raise revenue without hurting most taxpayers. One method, as presented in the Senate Democratic plan, is to convert tax deductions, which increase in value as income rises, to tax credits, which would provide benefits more broadly and evenly among low-, middle- and high-income households.
Tax deductions, however, are only one kind of tax break. Many others take the form of arrangements that allow wealthy taxpayers to either escape tax entirely on specific transactions or to defer it indefinitely.
There are plenty of repugs and some "democrats" in congress who occasionally bring up the home mortgage deduction-- and suggest eliminating that, all while ignoring this tax avoidance scheme, and most if not all of the others:
NINE-FIGURE I.R.A.’S Remember Mitt Romney’s $100 million I.R.A? Private equity partners apparently build up vast tax-deferred accounts by claiming that the equity interests transferred to such accounts from, say, their firms’ buyout targets are not worth much. No one knows how much tax is avoided this way. What is known is that I.R.A.’s are meant to help build retirement nest eggs, not to help amass huge estates to pass on to heirs.http://online.wsj.com/...