Here’s a question for Congressional Republicans: Why do I have to pay my federal income taxes and others don’t to the tune of more than $400 billion a year?
And according to the IRS Oversight Board, most of those taxes are owed by corporations and rich people with only a relatively small dollar amount of income tax evasion involving the middle class and the working class.
In 2012 the Obama administration wanted to increase the IRS budget by $1.2 billion including $240 million to hire 5,000 agents to go after the unpaid taxes. Such a move would have brought in an estimated $1.3 billion more a year. Some non-government experts believe with the right efficiencies and manpower that upwards of $40 billion could be brought in each year that is legally owed the government but isn’t paid.
The Republicans — hiding behind the anti-tax sentiment that most of us have — blocked the effort.
So instead of any effort to make the rich and corporate America pay their fair share, you get witty comments from folks like Utah Senator Orrin Hatch, the senior Republican on the Senate Finance Committee that crafts tax law. Hatch in 2012 said, “The IRS could close the tax gap entirely by putting IRS agents in every family’s living room and in every small business. But this is a price that a liberty-loving people and their representatives are rightfully unwilling to pay.”
Reading between the hyperbole, what Hatch is saying it is OK though for every family among the 99 percent and the small businesses that can’t buy influence for tax laws and tax credits in Washington, D.C., to pay the full price of their share of being an American while the rich and corporations get away with not paying their entire fair share.
Of course, most Congressional Republicans and many of their Democratic colleagues told the IRS to enforce the existing tax code with their current manpower. That means finding ways to interpret existing laws to squeeze even more out of corporations and individual Americans that already pay what it is clear that they owe in federal income taxes.
Which brings us to the fact there really is no free lunch.
The IRS is now preparing to go after the free meals that many Silicon Valley high tech firms such as Google, Facebook and Twitter serve their employees. The IRS argument is that it is a taxable employment benefit.
They want taxes in the equivalent of 30 percent of the fair market value of the food based on a normal retail situation. So if that lunch or dinner would cost $9 anywhere else, the IRS wants about $3 per meal.
Legally, the IRS can go after individuals for not paying the tax although the corporations are fair targets for “failing” to pay withholding taxes on the taxable benefit.
That means a high tech company worker whether they are an engineer or a janitor partaking in just one free meal a day owes the IRS $800 plus interest and penalties for each year they enjoyed a free lunch.
Have no fear. If you enjoy a catered meal once a year — think Christmas party — or the boss orders in lunch while you work with her on a project and has the company pick up the tab, the IRS says it isn’t coming after you, at least for now.
The “There’s-No-Such-Thing-as-a-Free-Lunch Initiative” is a directive from those ominous national senior IRS officials. They’re apparently the same ones that told auditors to go after conservative non-profit political groups.
None of this sounds fair. But then again, fairness isn’t in the political vernacular of Congress or IRS senior officials for that matter.
It would make more sense to go after the low hanging fruit — taxes that are owed but aren’t being paid. It has to be progressively easier to go after $400 billion than going back to taxpayer who have already paid their taxes and extracting another $800 plus per year.
The big difference is that honest taxpayers — the ones who pay their taxes — are pushovers. They also buy into rhetoric espoused by the likes of Hatch even though the people who benefit from it aren’t them but those who opt to profit from being Americans without paying their fair share of taxes.
It’s kind of ironic that the IRS is going after “free lunches” in the Silicon Valley while allowing the super rich and corporations to eat America’s lunch with the explicit consent of Congress.
This column is the opinion of Dennis Wyatt and does not necessarily represent the opinion of The Journal or Morris Newspaper Corp. of CA. He can be contacted at firstname.lastname@example.org or 209.249.3519.