You are being lied to about the IRS

The IRS is set to receive its largest funding increase in years thanks to the Inflation Reduction Act.

You know who should be worried about this?

Wealthy Americans who dodge taxes.

Recent figures estimate that the richest 1 percent are hiding more than 20 percent of their earnings from the IRS, accounting for more than a third of all unpaid federal taxes.

Some estimates show that collecting all unpaid federal income taxes from the wealthiest Americans could generate anywhere from $200 billion to $1.75 trillion over the decade.

So why hasn’t our government been able to collect all that untaxed money from the richest of the rich? Because the IRS has been underfunded and severely understaffed—thanks in large part to a decades-long campaign from Republicans to transfer wealth to the top.

Over the past 10 years, the IRS budget has been reduced by roughly 20%. Its staffing is at a level not seen since 1973 although the American population is about a third larger now.

On top of that, the tax returns of the wealthy are very difficult, time consuming, and incredibly costly to audit—and rich taxpayers often have platoons of lawyers and accountants that shield them from tax liabilities.

Without proper resources, it’s harder for the IRS to go after the wealthiest Americans who avoid paying their fair share.

As a result, just 2% of the richest Americans had their taxes audited in 2019, down from 16% in 2010.

Meanwhile, the poorest Americans—who often claim a tax break known as the earned income tax credit—are five times more likely to get audited because their tax returns are less complex, and because of pressure from congressional Republicans to root out incorrect payments of the credit.

When the IRS can’t function properly, all taxpayers aren’t off the hook evenly—and the result is a tax system stuck in a cycle where the working class bears the brunt while the rich hoard wealth that could be used to invest in America.

So, don’t believe the lies coming from the oligarchs and their propaganda machine—it’s all fear mongering. The 1% have an incentive to keep the IRS hobbled and unable to excavate their hidden wealth.

They also know the public is against them—boosting the IRS budget to strengthen tax enforcement on high-income taxpayers is a popular policy supported by more than two-thirds of registered voters.

IRS funding is a good thing. It means the agency can finally go after the real freeloaders in America: The super-rich.

This post originally appeared at

Robert B. Reich is the chancellor’s professor of public policy at the University of California, Berkeley and former secretary of labor under the Clinton administration. Time Magazine named him one of the 10 most effective Cabinet secretaries of the 20th century. He is also a founding editor of The American Prospect magazine and chairman of Common Cause. His film, Inequality for All, was released in 2013. Follow him on Twitter: @RBReich.

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