Tag Archives: $1 million

IRS Audits For Thee, But Not For Me

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On Friday, The Federalist posted an article about how the extra money given to the Internal Revenue Service (IRS) in the last budget passed by Congress is being used.

The article reports:

The Internal Revenue Service (IRS) is using a new army of tax collectors to conduct mass audits of middle-income earners after Democrats promised additional resources would only be used to target the rich.

On Thursday, Sen. Elizabeth Warren, D-Mass., celebrated the federal government’s collection of more than $1 billion in taxes from “high-wealth taxpayers” as a triumph for the agency’s radical expansion under President Joe Biden.

…A columnist for the paper trumpeted by Warren, however, pointed out that “Buried deep in the same story: Two-thirds of IRS audits initiated last year were on taxpayers making less than $200,000.”

The article notes:

“It should also be noted that nearly two-thirds of audits initiated in 2023 were on those making less than $200,000,” Brady told the paper.

In April, The Wall Street Journal editorial board reported on a review of the federal tax agency’s auditing practices, which found 63 percent of new government inquiries were to middle-income earners who made less than $200,000.

“Only a small overall share reached the very highest earners, while 80% of audits covered filers earning less than $1 million,” wrote the editorial board of The Wall Street Journal. “Don’t forget to save those charitable-giving receipts.”

It has been reported that nearly half of American Congress members are millionaires. Why would the people who write the laws write them so that their activities would be closely watched?

Does This Make Sense ?

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A website called 24/7 Wall St posted an article yesterday stating that hourly workers for General Motors will receive bonuses this year of between $5,500 and $7,000 each.

The article reports:

The payments are based on a formula that gives workers a $1 bonus for every $1 million in North American operating profit at the two companies.

On Wednesday (as reported at rightwinggranny.com) the Detroit News reported:

Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout. If the government sold the rest of its stock at current prices, taxpayers would lose more than $13 billion.

It just seems odd to me that the taxpayers are out $13 billion and the workers are getting bonuses of up to $7,000. Why isn’t some of the bonus money being used to pay back the taxpayers for what they were forced to invest?

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Class Warfare Is More Important Than Actual Numbers

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Yesterday John Hinderaker at Power Line posted a story on the Democrats’ recent efforts to pay for a continuation of the payroll tax by imposing a tax on the rich. (Actually, the Democrats solution to any given problem at any given time is to impose a tax on the rich). Anyway, a Power Line reader ran the numbers to see how much impact the proposed tax on the rich would have. This is what the reader found:

The taxes on the highest incomes are never enough for any of their schemes. The Dems’ proposal is a fraud, which the MSM helps to perpetrate by never estimating the revenues from upper income tax increases.

Politico reports that the cost of the Democrats’ payroll tax reduction is $265 billion. Will that really be paid for by a 3.25 percent surtax on adjusted gross incomes over $1 million?

According to the Tax Policy Center at the Urban Institute/Brookings Institute, approximately 388,000 households have income above $1 million in any given year; the average income of such households is about $2.7 million. The surtax would be levied on the increment above $1 million. So the arithmetic is simple on a static analysis: 388,000 * $1.7 million * 3.25% = $21.437 billion.

So the “millionaires and billionaires” surtax doesn’t come even remotely close to the reduction in payroll tax. It’s a complete fraud–gratuitous class warfare for revenues that, in the overall scheme of things, are trivial.

The problem with the budget is not the lack of tax revenue–it is the increase in spending. The Obama administration has increased government spending to approximately 24 percent of the gross domestic product (GDP). It had previously been between 18 and 20 percent. The average tax revenue collected by the government in a year is about 18 percent of the GDP. Therein lies the problem. Even when taxes on the rich are increased, the amount collected hovers around 18 percent because the ‘rich’ have accountants that help them pay as little taxes as possible. When you tax the rich you only wind up taxing the middle class more and moving closer to the elimination of the middle class. That is not a good idea.

 

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