The imaginary federal income tax gap of several hundred billion dollars

Our lifelong busybody career politicians are always looking for opportunities to raise government revenues for their spending orgies!

Thus, it is no surprise that government administrations and politicians claim for many years there is a huge gap between what is owed to the government and what is actually paid to the government in form of taxes, fees etc.

This alleged gap is a fantasy! The usual scapegoat are businesses and self employed!

Make no mistake, if the demented and senile 46th President would really try to close this fictitious tax gap, the economy will go into recession! Jobs will be lost. Investments postponed or cancelled, you get the picture! 

Here is one of the latest examples, a May 2021 issued report by the U.S. Department of the Treasury:

The-American-Families-Plan-Tax-Compliance-Agenda.pdf

In the Executive Summary of the report, we read:

"This report describes the President’s tax compliance initiatives that seek to close the “tax gap”—the difference between taxes owed to the government and actually paid. According to Treasury analysis, the tax gap totaled nearly $600 billion in 2019 and will rise to about $7 trillion over the course of the next decade if left unaddressed—roughly equal to 15% of taxes owed. These unpaid taxes come at a cost to American households and compliant taxpayers as policymakers choose rising deficits, lower spending on necessary priorities, or further tax increases to compensate for the lost revenue.

The magnitude of the tax gap means that compliance initiatives have the potential to raise substantial revenue, but these reforms also improve tax progressivity and economic efficiency. While roughly 99% of taxes due on wages are paid to the Internal Revenue Service (IRS), compliance on less visible sources of income is estimated to be just 45%. The tax gap disproportionately benefits

high earners who accrue more of their income from non-labor sources where misreporting is common. Further, the tax gap imposes distortions because of the resources some expend to avoid paying taxes and the incentives created to shift economic activity into certain areas where tax liabilities can be illegally evaded. ..."