The consistent diminishment of the enforcement capabilities of the IRS creates the “tax gap,” the shortfall of revenues compared with expectations, because of tax evasion. Estimates of the size of the tax gap this year run to as high as $600 billion. The U.S. budget deficit is currently $779 billion, as William Gale and Aaren Krupkin of the Brookings Institution report. That means “the tax gap could plausibly have been 70-80 percent as large as the entire budget deficit in 2018,” they observe. The wealthy, of course — they’re the source of most of the evasion.

Source: Los Angeles Times April 15, 2019 16:18 UTC