Recent
news articles about skyrocketing tax fraud and corporate
tax dodging have prompted a high level of public concern
about the overall fairness and effectiveness of our current
tax system. AskQuestions.org – an online news site that addresses
issues raised by public demand – released a report today
on “Who Really Pays Taxes in America?”
Drawn
primarily from government statistics, the report describes
not only how the tax burden has shifted from corporations
to private citizens over the past 20 years, but also a
disturbing new twist: the richest American households pay
about 30 percent less tax – which includes federal, state,
and local taxes combined -- than middle-income households
pay. And the public apparently understands what’s going
on: an AP poll released Tuesday reports that 49 percent
of Americans believe their taxes have gone up, not down,
as a result of the Bush tax cuts, consider all the new
local and state taxes imposed in response to withering
Federal grants to the states. And new CNN/Money Magazine
poll reports that, "60% of Americans said the Bush tax
cut did not personally help them."
In his
proposed budget for 2005, President Bush cuts another $6
billion in federal aide to states, even though 30 states
already face shortfalls totaling about $40 billion next
year and more cutbacks in state spending are inevitable,
as well as more increases in local taxes. While there are
no national statistics that add up the costs, anecdotal
evidence is clear. One California couple received a $100
tax refund from President Bush for 2003, but paid $515
in new local taxes. A self-employed man living in Nassau
County, NY got a $300 tax rebate last year, but his property
taxes went up $2,250.
While
honest taxpayers deal with their growing burden, the independent
IRS Oversight Board reported that tax fraud is $311 billion
dollars per year – more than federal spending on Medicare
in 2003 and greater than the gross revenues of either Walmart
or General Electric. The Board continually requests funding
to strengthen resources for IRS enforcement, but because
some of the biggest campaign contributors may be the country’s
worst tax cheaters, the incentives for auditing tax cheats
is nil. As a result, audits are focused on those at the
bottom of the income scale.
Yesterday,
David Cay Johnston reported in The New York Times that
corporate audit rates have dropped by half in recent years,
and noted that in 2003 the IRS conducted face-to-face audits
with only seven out of 1000 corporations (compared to 29
per thousand in 1992).
“If we
simply collected the taxes cheaters are withholding from
the system, we would have enough money to pay the college
fees of every student in America, or to provide health
insurance for small business employees,” says the AskQuestions.org
report.
AskQuestions.org
practices “bottom-up” journalism by inviting the public
to submit questions. The most popular questions are handed
over to professional researchers and reporters. Answering “Who
Really Pays Taxes?” required the AskQuestions.org team
to assemble a dozen practical suggestions from a range
of experts about increasing the fairness of the tax code
while also making it more effective at stimulating sustained
economic growth.
Neither
Presidential candidate is likely to talk about fraud and
favoritism during the election campaign, but voters apparently
want answers on these very issues. And the AskQuestions
report frames the debate from a voter’s perspective, so
that people will be armed with the information they need
in order to raise their concerns with the candidates.
___________________________________________________________________________
Cheryl
Woodard is a cofounder of PC
Magazine, PC World, Macworld and the Macworld Expos, and
author of the book, Starting and Running a Successful
Newsletter or Magazine (Nolo Press, 4th edition, 2004).
A full-time business consultant to publishers, Woodard
also serves on the board of the Independent Press Association.The
full report about taxes is available online, along with
the public questions and comments that prompted the article
at http://www.askquestions.org/details.php?id=39 |
