The Biden administration on Thursday unveiled a detailed plan laying out a new “tax compliance agenda” designed to beef up IRS enforcement and crack down on wealthy tax cheats – a proposal that it estimates could generate as much as $700 billion.
In a 22-page report, the Treasury Department said that investing $80 billion in the IRS could shrink the “tax gap” – estimated at roughly $584 billion in 2019 – by about 10% over the next decade. The tax gap, or the difference between taxes legally owed and those collected by the IRS, is expected to surge by $7 trillion over the next decade.
The White House’s estimates on how revenue it could generate from increasing the IRS budget far exceeded projections by the nonpartisan Congressional Budget Office. But Treasury officials said the tax gap could be higher than their estimate – which they called conservative – because it’s so difficult to calculate.
IRS Commissioner Chuck Rettig previously suggested during a hearing on Capitol Hill that about $1 trillion in taxes goes uncollected each year.
The enforcement plan is a central part of President Biden’s multi-pronged plan to pay for his $1.8 trillion American Families Plan, a sweeping spending proposal that would dramatically expand by the government-funded social safety net, by raising taxes on wealthy Americans and corporations.
- Corporations around the world should pay at least a 15% tax on their earnings, the Treasury Department said Thursday.
- The department noted that “discussions should continue to be ambitious and push that rate higher.”
- Treasury Secretary Janet Yellen has said establishing a global minimum rate would help halt the “race to the bottom” globally for tax rates.
Corporations around the world should pay at least a 15% tax on their earnings, the Treasury Department said Thursday as part of its push for a global minimum for businesses.
The final rate could go even higher than that, according to a Treasury release that said the 15% minimum is a “floor and that discussions should continue to be ambitious and push that rate higher.”
U.S-based companies currently pay a 21% rate, a level that was slashed during the Trump administration. Previously, the top rate had been 35%.