Whenever there are new or proposed changes to tax law, your eyes may glaze over as they skim the headlines. Meanwhile, the wealth defense industry — and its legions of accountants, financial advisors, and lawyers — is quietly mobilizing.
Last year, the Biden administration unveiled a proposal for a revitalized IRS, including a stronger “wealth squad” to take on tax evasion by the extremely wealthy, that is, people with tens of millions of dollars. Soon after, the wealth defense industry announced strategies that wealth advisors should use to prepare.
The wealth squad, officially called the Global High Wealth Industry Group, was formed in 2009. But the following year was a pivotal shift in U.S. politics, and due to conservative blowback against the agency, the IRS has since bled funding. Combine budget cuts with the power of billionaires and multimillionaires to hire seemingly endless teams of lawyers and accountants, and it’s clear how the wealth squad has not always been an effective force.
Emphasizing both the unrealized purpose of the squad and the hope that enforcement will increase, a recent report from the Government Accountability Office (GAO) highlights how audit rates have significantly declined over the past decade. This is particularly true for high-income households. Between 2010 and 2019, audit rates of households earning more than $5 million per year declined by 86 percent, falling from a more than 16 percent audit rate to just over 2 percent.
The reduction in audits of the wealthy is concerning not only because of the substantial revenue lost from tax evasion, but also because of the explosion of wealth — and wealth hiding — over the past decade.
Let’s take, for example, the wealth of the top ten billionaires from Forbes’ list of billionaires in 2010. That year, the list was topped by Mexican billionaire Carlos Slim; Jeff Bezos had yet to break the top 40 and Elon Musk’s Tesla had only just gone public. The total wealth of the world’s ten richest people totaled $342.2 billion.
Fast forward almost a decade later, to 2019, when Bezos was number one. By then, the total wealth of the top ten billionaires in the world had more than doubled, to $744 billion.
The start of the pandemic the following year was particularly lucrative, too. As the Institute for Policy Studies reports, U.S. billionaire wealth has soared by more than half — $1.7 trillion — since the pandemic began.
This content originally appeared on CounterPunch.org and was authored by Kalena Thomhave.
Kalena Thomhave | Radio Free (2022-06-08T08:47:22+00:00) Whither the Wealth Squad. Retrieved from https://www.radiofree.org/2022/06/08/whither-the-wealth-squad/
Please log in to upload a file.
There are no updates yet.
Click the Upload button above to add an update.