ProPublica leak shows audit fear factor waning
One of my four daughters lives in a great older house by White Rock Lake in Dallas. The yard backs up to a trail to the lake. That makes it popular for bikers, walkers and strollers. The natural setting also seems to be popular to coyotes.
Right now, there is a mother coyote with three pups in the trail area. On one hand, adorable. On another, frightening. Seems that Mama Coyote is chasing people off the trail. This includes human mothers with their babies in strollers.
The city says the problem is that the coyotes are no longer afraid of humans. Without the fear factor, the coyote behavior is just not acceptable any longer.
Many of you may remember some of the old “sitcoms.” One recurring theme was an IRS audit.
Ralph Kramden of “The Honeymooners,” James Evans of “Good Times,” Archie Bunker of “All in the Family,” all endured an IRS audit. The storyline focused on their fear.
Significant reductions in IRS budgets began in 2010. Audit rates dropped. Many audits are now handled by correspondence — which means a letter. Not an Archie Bunker letter telling Arch to go down to the IRS for an audit. These are pen pal letters.
It seems the fear factor is gone. Wild tax animals now are willing to chase the IRS off their trail.
Their aggression seems to be working.
I respect coyotes and other wildlife. I just don’t want them running the trails. I respect those who seek to pay the least tax the law allows. But they need to respect others on the trails, stay in their lane so to speak.
ProPublica just got a large data dump of IRS tax return data. This data covers the wealthiest taxpayers in the country for a 15-year period. The data seems to be legitimate. It has sparked congressional investigations of the data breach.
Initial reporting is that Jeff Bezos paid no tax in 2007 and 2011. Bezos reported $46 million of income in 2007 but eliminated all tax with claimed deductions. This was while he was worth a reported $3.8 billion.
It was also reported that Elon Musk paid no tax in 2018, George Soros paid no tax for three consecutive years, Carl Icahn paid no tax for two years, and Michael Bloomberg paid no tax for one year.
ProPublica computed what it described as a “true” tax rate. This was the tax paid divided by the increase in the person’s net worth as reported by Forbes. Warren Buffet’s true rate was .10%. Bezos was .98% and Bloomberg’s 1.30%.
The details of how the tax bills were so low will be released later. For now, I have three general observations of the ProPublica revelations.
First, virtually no one will understand how these wealthy people reduced their tax bill. I suspect the revelations will be a bit shocking to the few experts who do understand. The details may support calls for tax reform.
For several reasons we have made it far too easy for the wealthy to avoid taxes. This undermines confidence in the entire system. The evidence reported by ProPublica will further erode confidence in the system. Second, the ProPublica true tax rate is just silly because no one, even you or me, would support being taxed on growth in wealth. Stock market increases and the crazy housing market raise even the wealth of the ordinary person. That person would find the “true” tax rate unfair.
Third, while the data dump has led to sensational headlines in the popular press, it is also illegal and wrong.
I found it outrageous that the Treasury secretary failed to comply with a statutory requirement (he “shall”) to release former President Trump’s tax returns to the appropriate House committee. Data was withheld in spite of a legal request.
It is equally outrageous that someone released tax returns of 25 wealthy Americans with no legal request. While the revelations may be interesting, they come from an intrusion into the privacy of the affected taxpayers.
If House members received and then leaked legally obtained Trump return information that would be illegal. Whoever gave return data to ProPublica broke the law. They should be prosecuted. I hope not celebrated.