U.S. tax dodgers will cost $2 trillion-study
WASHINGTON, March 27 (Reuters) - Rich Americans and corporations who don't pay what they should in taxes will cost the country more than $2 trillion over the next 10 years, a watchdog group said on Tuesday.
``Thousands of wealthy individuals and corporations avoid paying their fair share of taxes each year,'' Charles Lewis, Center for Public Integrity director, said at a Washington news conference to introduce his book on the subject.
``In other words, some Americans, by cheating on their taxes, are giving themselves a bigger tax cut than even the Bush administration is proposing for us.''
President George W. Bush's, 10-year, $1.6 trillion tax cut plan includes an across-the-board reduction in income tax rates, a reduction in the ``marriage penalty'' paid by two-income married couples and an elimination of the estate tax.
The plan has easily passed a Republican-controlled House of Representatives but faces a more difficult time in the Senate, evenly split between both parties.
MILLIONAIRES CLAIMING LOSSES
The most recent Internal Revenue Service statistics available indicate that the cost of tax avoidance and evasion will be $195 billion a year, a conservative estimate, Lewis said.
Much of that comes from legal manuevering by corporations, Lewis said.
Corporations spent $60 billion less in 1997 than they would have paid in 1990 at the same rate. At the same time, individual taxpayers paid $80 billion more, Lewis said.
``We also discovered that some wealthy individuals, by complying rigorously with the code, dotting every 'i' and crossing every 't', paid little or nothing in income taxes,'' the book's co-author Bill Allison said.
About 10 percent of the country's millionaires -- individuals whose adjusted gross net income is one million dollars or more -- paid nothing in federal income taxes because they claimed losses for 1995, Allison said.
And while tax filings increased 14 percent between 1989 and 1999, the IRS's permanent staff dropped 26 percent over the past decade, Allison added.
``You didn't hear any presidential candidate talking about closing loopholes, and you don't hear anyone in Congress saying we need to beef up enforcement,'' Lewis said.
But one other organization didn't agree with the Center's findings.
``Instead of talking about the real problem and real solutions, the authors hand-pick a few of the very worst cases of tax abuse and use scare tactics to push for new laws and an army of IRS enforcers,'' a spokesman for the National Taxpayers' Union said.