Servicing the Rich (

[Robbien]

In the New York Times story about how America loses more than a quarter trillion dollars in tax revenue each year to cheating, the paper claimed, “The I.R.S. said that 80 percent of taxes owed but not paid by individuals were a result of underreporting of income, often by people working in the service sector.”

. . .

So I went to the primary source, the IRS’s new report, and found that yes, it is true that “noncompliance from underreporting account for more than 80%” of the missing tax revenue. However, page 10 of the report breaks down that statistic a bit more. It shows specifically that the underreporting of “business income” accounts for about $100 billion of the tax gap, and underreporting of “wages, salaries, tips, etc.” account for just $18 billion. “Business income,” remember, is defined as money made by sole proprietorships, S corporations, etc. The category includes wealthy lobbyists, sports agents and high-paid political consultants - not exactly what you think of when you hear the phrase “working in the service sector.” In fact, I can find absolutely no data in the IRS report which justifies the New York Times suggesting that the problem “often” emanates from those “working in the service sector.”

What’s my point? Simple: the media often reinforces dishonest stereotypes designed by conservatives to help the right-wing pursue its ideological agenda. The New York Times’s error plays into the right-wing’s “persecuted rich” myth, reinforcing the idea that the rich are overtaxed, and it is working class people who are ripping off the system.

http://www.thinkprogress.org/

[villager]

1. I haven't trusted any of the spin on this "report"

...which has been dutifully filtered through the news media lately. Designed to get us to think the "little people" are the ones really avoiding their "duty" to pay taxes...

[punpirate]

3. This is in stark contrast to...

... a Guardian article less than a week ago on a study done in the UK which estimates the amount of money hidden by the wealthy in offshore, low-tax shelters to be $11.5 trillion (an amount roughly equal to US annual GDP), and the annual income on that amount close to a $1 trillion, the taxes on which worldwide would about $265 billion annually.

[papau]

2. nice find! and consistent with past IRS reports. The Sch C income is a

joke.

I've had clients making over a million that were upset that after hiding all the income, they had too little reported income (only a few thousand) to make a pension contribution worthwhile!

As I recall Bush files a Sch C - and it is at least a 50/50 bet that he is hiding a few dollars in that Sch C.