Skip to content


May 18, 2016


Lobel is chairman of the board of Tax Analysts and a partner at Lobel, Novens & Lamont, LLP. He has written an article for the American Prospect’s spring 2016 edition entitled: “The Multiple Ways that Plutocrats Cripple the IRS.” The article mirrors many complaints I have made in many blogs I have written but gives numbers that I did not. I will employ those numbers to show how you and I are paying the taxes that plutocrats should be paying but for IRS budget cuts and other limitations on collection of taxes from the rich sponsored largely by Republicans in Congress.

Tax collectors have been pilloried and despised throughout history. Saint Matthew was a tax collector before he got religion and was in need of forgiveness for having been a tax collector, only one step above a leper.  I will in this blog suggest that the IRS is our friend; that taxes are the price we pay for civilization; and that the problem is not the identity of the tax collector but rather the constraints (both monetary and legislative) that he or she must live under passed by people in Congress who make such laws and rules, people in Congress who have long since sold out to the plutocrats.

How could this happen? Well, take a look at the political composition of the Congress. The Constitution requires that all revenue bills originate in the House, and the House is dominated and intimidated by Tea Party Republicans. Cruz has even said that he would abolish the IRS if elected, a ridiculous idea that rivals Trump and his promise to build a wall at Mexican expense all along our border. (Parenthetically, did it ever occur to Trump that Mexicans might come up with the idea of tunneling under the wall? Uh.)

The massive budget cuts Republicans have inflicted on the IRS resulted in taxpayers’ not being able to get anyone on the phone and the Republicans relented after hearing the pleas of seven former IRS commissioners and did approve a $290 million increase in appropriations for customer service in Fiscal Year so that now, according to IRS Commissioner John Koskinen, the number of calls answered this year at 38% should increase to 60%. Unfortunately but tellingly, the Congress did not increase the IRS enforcement budget, which results in the loss of billions of dollars owed but not collected because of the lack of IRS personnel, whose ranks have been cut by 15% since 2010 resulting in the loss of 2,200 revenue agents with an expected loss per the IRS of a loss of 2,000 to 3,000 employees this year. (Again parenthetically, the chair of the House Oversight Committee, Jason Chaffetz of Utah, and 18 of his Republicans are now trying to impeach Commissioner Koskinen on behalf of their plutocratic masters.)

The IRS in 2006 was unable to collect about $385 billion in taxes per the Government Accountability Office, equivalent to roughly one-third of total federal discretionary spending. Koskinen notes that this has accelerated because of the recent IRS budget cut. The Senate Permanent Investigations Subcommittee reported in 2008 that 95% of the 20,000 bank accounts held by Americans in the UBS bank in Switzerland were hidden from the IRS. Professor Zucman, an economist at the University of California, Berkeley, estimated that about 8% of the world’s financial wealth is stashed in offshore accounts, resulting in a global loss of $200 billion in income-tax revenue, and that, since 1980, the volume of U.S. equities held by tax-haven investors has more than quadrupled. America’s rich now have at least $1.2 trillion in financial  wealth offshore.

Think that’s bad? It’s just the start in the plutocratic march to avoid and evade payment of taxes. The numbers above do not include the some $2.1 trillion in profits that are not taxed because they are kept offshore by multinational corporations, and who owns multinational corporations? Plutocrats. Professor Kimberly A. Clausing of Reed College estimates the amount of taxes being avoided by multinational corporations shifting profits offshore to be between $77 billion and $111 billion each year, so what does that mean to you and me as taxpayers?

It means that such plutocratic chicanery results in increased budget deficits, lower government spending, and higher taxes on you and me and domestic corporations that have to compete against the multinationals. Lobel says it best: “If the top income earners don’t pay their fair share of our taxes, the middle-income folks, who have been convinced that cutting taxes is a good thing, will have to fill the void left by the plutocrats. . . The Republicans are proposing solutions that will add to the middle-class burden and encourage the rich to fill their campaign coffers.” Amen! Exactly!

One would never guess that the IRS is essential to funding the government by listening to Cruz (abolish the IRS) or Fiorina (reduce the tax code to three pages). Unfortunately, as Lobel points out, many of those who supported them actually believe such promises are possible, thanks to tax-cutting theology spewed out by “think tanks” funded by plutocrats like the Koch brothers. Cruz’s plan would have shifted the burden of funding the government from the plutocrats to the disaffected and clueless middle class, a class that is being hollowed out by, among other things, wage inequality. Further, every Republican tax-cut proposal would increase the deficit significantly – so much for fiscal responsibility!

Finally, there should be a price to be paid by these politicians who have been selling us out to the plutocrats. They should be unmasked and thrown out of office. They have hidden behind the tax-cutting theology provided by their plutocratic backers in opposing an effective IRS and real tax reform, and in a broader sense, their provision of the means of continued enrichment of their plutocratic backers by backing policies that do just that amounts to a continuing shift of wealth to the top 0.1 per cent away from the middle class, all of which is undermining our already underperforming economy due to wage inequality and tepid demand. Let’s elect people who will see to it that we ALL pay our fair share of the tax load, including the plutocrats.   GERALD    E



From → Uncategorized

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: