Tax Cheats Benefit the Most From Coronavirus Relief

Negotiations began this week for another coronavirus economic relief package, anticipated to be the last before the general election in the fall.

This follows the initial Coronavirus Aid, Relief, and Economic Security (CARES) Act, the bipartisan relief enacted in April that deigned to grant one-time $1,200 checks; and the Heroes Act that passed the House of Representatives in May yet still languishes in the Republican-controlled Senate.

Unless their jobs were deemed “essential,” most average Americans found themselves out of work during the times states shut down to prevent further virus contagion.

Many still do.

A paltry $1,200 was never enough to keep American households solvent for three months.

The mortgages, rents, and student loan payments that banks were “generous” enough to defer are coming due.

The extra $600 in unemployment benefits the CARES Act guaranteed expires next week, threatening to throw 33 million workers into more fiscal peril.

But there are some who are making out, appropriately, like bandits.

According to a recent Americans for Tax Fairness and the Institute for Policy Studies analysis, American billionaires’ wealth grew an average of $42 billion each week the  pandemic bared down on us, more than $700 billion total since March 18, the date the analysis indicates as the first official day of the pandemic emergency.

Those who profited the most?

Amazon CEO Jeff Bezos and Zoom’s Eric Yuan.

In 2018, the Internal Revenue Service (IRS) collected $3.5 trillion in taxes, almost 95 percent of total federal revenues.

But there is also an amount taxpayers do not pay by the filing deadline, called the tax gap, the IRS estimates between 2011 and 2013 to be, on average, $441 billion annually.

Recent Harvard University research shows those responsible for 70 percent of that tax gap are the richest one percent of income earners.

That means the wealthiest Americans–the ones many assume are paying the most taxes since they should–are gypping the American public out of about $266 billion.

Image credit: CBO via TMI

What could we do with that money?

Vt. Sen. Bernie Sanders explained:

“With the money that these tax cheats owe, this year alone, we could fund tuition-free college for all, eliminate child hunger, ensure clean drinking water for every American household, build half a million affordable housing units, provide masks to all, produce the protective gear and medical supplies our health workers need to combat this pandemic, and fully fund the U.S. Postal Service. That is an absolute outrage, and this report should make us take a long, hard look at what our national priorities are all about.”

Despite all the pearl-clutching about how “we can’t afford it,” we could also provide every man, woman, and child born in this country healthcare as a human right.

Yet, Vox reported this week:

“Millions of Americans lost their jobs, and businesses across the country closed their doors as part of a planned shutdown.” 

Nobel Prize-winning economist and New York Times columnist Paul Krugman added:

“The cliff is totally visible in front of us, and yet we’re not ready. It’s probably already too late to avoid enormous hardship.”

After the 2008 financial crash, we granted $700 billion big banks.

The Federal Reserve committed between $16 trillion and $29 trillion to large financial institutions.

Lawmakers recently handed $4 trillion in pandemic relief to large corporations.

As Sen. Sanders commented:

“For every dollar we invest in getting the IRS the staffing and resources it needs, we get three dollars back in unpaid taxes. Make no mistake: the primary beneficiaries of IRS funding cuts are wealthy tax cheats and large corporations. Do not think for one second that the wealthiest country on Earth is unable to make critical investments to meet people’s basic needs in terms of healthcare, food security, education, and unemployment. Congress is leaving hundreds of billions of dollars in taxes uncollected from the wealthy. We have got to invest in a robust IRS that focuses on the biggest culprits of tax evasion so we can prioritize those resources to ensure people’s basic needs.”

So are your basic financial needs being met during this historic and difficult time?

It isn’t because we don’t have the money.

Image credit: www.cnbc.com

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