Andrew Harnik/AP Photo
Documents arrive as the House Ways and Means Committee holds a hearing regarding tax returns from former President Donald Trump, on Capitol Hill in Washington, December 20, 2022.
There is a harmonic convergence between three recent events—the release yesterday of a summary of Trump’s tax returns; the December 6 criminal conviction of Trump’s enterprises on 17 counts of tax fraud; and the $80 billion increase in the funding for the IRS.
The tax returns, whose full details will be released in coming days, give a snapshot of how Trump did it. Though he claimed to be a billionaire, he took bogus deductions to reduce his tax liability to a pittance. For tax purposes, he reported $60 million in losses during his presidency, even though he was clearly making serious money. No wonder he fought so hard to keep the returns secret.
One of the many excuses Trump gave for not releasing his tax returns was that he was in the middle of an audit. Now we know that was another outright lie.
Though the IRS was supposed to audit Trump’s returns, the revenue service somehow never got around to auditing Trump during his first two years in office, despite being required to do so by law, in a legal mandate whose regulations date to the Carter administration after Watergate, and state that “individual tax returns for the president and the vice president are subject to mandatory review.”
Trump’s scams were complicated, but not that complicated. The IRS was clearly corrupted while Trump was president. Maybe the additional funding with help reorder IRS priorities.
As with so much that Trump did, his scams were merely a caricature of what is business as usual for many American corporations. Far too many real estate operators, who earn massive profits, pay far too little in taxes. The tax law is biased in their favor and the IRS has been totally outgunned. People who take the Earned Income Tax Credit are far more likely to be audited than multimillionaire investors.
Trump’s allies have squawked that this release of Trump’s taxes sets a dangerous precedent—another way that Trump’s critics supposedly have sought retribution; and that when the shoe is on the other foot, Joe Biden had better watch out. But this is total nonsense. Every other president has released his tax returns. Trump is under fire only because he’s a grifter.
The right has also vowed to resist the increase in the capacity of the IRS. Kevin McCarthy has made the reckless claim that an “army of 87,000 IRS agents will be coming for you.” In fact, Treasury Secretary Janet Yellen has stated flatly that audits won’t increase for taxpayers with less than a $400,000 income.
The increased IRS staff will first improve taxpayer service and more importantly restore capacity for audits of the wealthy that was decimated in recent years. Between 2010 and 2019, the audit rate for corporations declined by 54 percent, and for individuals with more than a million dollars of income, it declined by 71 percent.
The new revenue agents are not coming for “you” but for the tiny minority of wealthy people who evade taxes at your expense, either through fraud or through barely legal loopholes that should be closed.
The other harmonic convergence is in the right’s continuing campaign of apology for Trump, its attack on the IRS, and its defense of tax scams that come at the expense of most Americans. In that respect, recent events are usefully clarifying.
