A Step Toward Economic, Racial, and Social Justice
Rep. Ro Khanna (CA-17), Deputy Whip of the Congressional Progressive Caucus & Member of the House Committee on Oversight, has introduced the Stop Corporations and Higher Earners from Avoiding Taxes and Enforce Rules Strictly (CHEATERS) Act to bring back tax enforcement on the ultra-rich.
Without raising taxes on anyone, the Stop CHEATERS Act would raise an estimated $1.2 trillion in revenue over 10 years, by investing $100 billion into the IRS over the next decade while imposing auditing and reporting requirements to prevent tax cheating from the wealthiest corporations and individuals. This proposal was recently laid out in a proposal in Tax Notes by Dr. Natasha Sarin, University of Pennsylvania Law Professor, Dr. Lawrence Summers, former Treasury Secretary, and Charles Rossotti, former IRS Commissioner.
Over the last 25 years, IRS enforcement resources have been cut 28 percent, while individual returns have increased 31 percent and business returns have increased 80 percent. Khanna’s bill would provide the IRS the funding it needs with strings attached, to ensure that additional money goes toward enforcement and audits of the ultra-wealthy and the wealthiest corporations in America.
The bill does not add any burdensome new requirements on small business owners, who would continue to prepare and pay their taxes like normal. Individuals with business income, or who own S-corporations or Partnerships, and who have total income in the top 3 percent of taxpayers will receive a new 1099 Form to prepare a more accurate tax return and ensure that business income for the wealthy isn’t hidden from the IRS.
Thanks to over a decade of underfunding, the IRS in its current state is no match for the amount of criminal tax evasion being committed by the top 1%,” said Morris Pearl, Chair of Patriotic Millionaires. “We’ve almost reached the point where the rich and powerful can simply decide not to pay their taxes and face no consequences for their misbehavior. By giving the IRS the tools it needs to properly tackle wealthy criminal tax evasion, the Stop CHEATERS Act will finally hold millionaires and billionaires to the same standard as normal, hardworking taxpayers.”
“IRS budget cuts have decimated the agency’s ability to ensure that wealthy individuals and large corporations are paying the taxes they owe, stacking the deck even more in favor of the wealthy and powerful and draining hundreds of billions of dollars in revenue,” said Seth Hanlon, Senior Fellow at the Center for American Progress. “Representative Khanna’s Stop CHEATERS Act provides additional resources and tools to crack down on tax dodging by millionaires and large corporations and enable the agency to better serve ordinary, honest taxpayers. It is an important step toward economic, social, and racial justice, and an economy that works for all Americans.”
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