Tax evasion is a lifestyle among the rich and famous. Paul Krugman mentions in his column that “one recent estimate is that more than 20 percent of the income of the top 1 percent goes unreported.”
The occasion is congressional Republicans balking at including more Internal Revenue Service enforcement funding in the infrastructure bill so the agency might collect more of what We The People are owed and not seeing in our Treasury balance: perhaps $500 billion or more per year. Those additional funds would help offset the shared cost of replacing the crumbling infrastructure on which those very untaxed private fortunes were made. But see, some of us never learned all we needed to in kindergarten.
Krugman is unsurprised that the 1 percent have Republican defenders in Congress. But they dare not make their usual “job creator” arguments about tax evasion, do they? He writes:
And who’s the constituency here? When a millionaire or billionaire evades taxes, this comes at everyone else’s expense: A bigger budget deficit might mean less room for social spending, but it also means less room for legal tax cuts. So everyone should be in favor of cracking down on tax cheats — everyone, that is, except the tax cheats themselves. You might even think that wealthy Americans who do pay what they owe, either because they have scruples or because they care about their reputations, would be especially angry at their peers who flout the rules.
Sure, the plumber offering you a discount for paying cash has similar motives, but the majority of working Americans who live for that Friday paycheck have less opportunity to cheat.
So tax evasion mainly involves business income — or, rather, “business” income, because it takes place via partnerships and other entities such as S corporations that are mainly accounting fictions rather than entities producing actual goods and services. There are some legitimate reasons these entities are allowed to exist, for example to help in retirement planning. But they also offer ways to hide income from the tax authorities: underreported cash inflows, exaggerated costs, personal perks — like the apartment the Trump Organization provided its chief financial officer — reported as business expenses rather than individual income.
But why defend that criminality whatever the color of the perpetrator’s collar?
Obviously some big tax cheats are also big political donors. What I’d suggest is that the cheats’ clout within the G.O.P. has actually increased as the party has gotten crazier.
There have always been wealthy Americans who dislike the right’s embrace of racial hostility and culture wars but have been willing to swallow their distaste as long as Republicans keep their taxes low. But as the G.O.P. has become more extreme — as it has become the party of election lies and violent insurrection — who among the wealthy is still willing to make that trade-off?
Some rich Americans have always been right-wing radicals. But as for the rest, the party’s base within the donor class presumably consists increasingly of those among the wealthy with the fewest scruples and the least concern for their reputations — who are precisely the kind of people most likely to engage in blatant tax evasion.
Such as the former chief executive whose family business is under criminal investigation for the same. Even in exile, the patron saint of tax cheats is the titular head of the Republican Party. If allegations are true, he and his family have spent a lifetime as tax cheats. G.O.P. legislators still in power have little incentive for angering that nest of vipers or the political donor class upon which they rely for retaining power.
Tax cheating supports politicians’ lifestyles, too. How many of our congressional millionaires launched their lawmaking careers with funds they and supporters unlawfully hid from the taxman?
Krugman concludes:
So maybe one way to understand the opposition to strengthening the I.R.S. is that it represents an unholy alliance between white supremacists and tax cheats. Is this country amazing, or what?