Democrats want to claw back taxes that America’s richest often avoid to fund their infrastructure package, but some provisions may not raise as much as initially expected.
That could make it harder to garner political support.
Two of the biggest revenue generators for the $3.5 trillion plan moving through Congress are beefing up the Internal Revenue Service to go after wealthy Americans and requiring more disclosures from financial institutions. Those two provisions alone are expected to bring in $700 billion over 10 years, according to estimates by the White House.
Those should help close the so-called tax gap — the difference between how much tax is owed and the amount actually collected — which totals around $600 billion per year, or $7 trillion over 10 years, according to recent estimates from the Treasury Department. The top 1% of earners account for 21% of the uncollected tax or $163 billion a year.
“Giving the IRS the information and resources that it needs will generate substantial revenue,” Natasha Sarin, deputy assistant Treasury secretary for economic policy, wrote. “But even more importantly, these reforms will create a more equitable, efficient tax system.”