RICHMOND — The deadbeats who don’t pay their taxes are expensive for the rest of us.
Officially defined as an idle, feckless, or disreputable person, a deadbeat in this country is most often used to describe a person who evades his bills — as in deadbeat dad. While the government hires people to chase down the guys who have vanished from the supper table forever, it’s been sluggish about the other deadbeats.
By not giving the IRS the resources it needs — extra people, for one thing — the feckless rich either don’t pay their tax bill or have magic accountants capable of preparing intricate mazes of avoidance. Such work led to a $750 tax bill for one of our self-declared American billionaires.
Those who work for a salary don’t have the option. They fill out a form listing their dependents, and the company takes out the withholding tax. The money goes to the U.S. Treasury. It’s pay as you go, and when tax time rolls around, the employee gets a refund or pays a few more dollars.
When employees who retire with an individual retirement account reach age 70½, the government requires them to start taking out a certain percentage of that savings every year. Before the check goes out, guess what? The IRS gets its share directly — no chance for any of us to spend that cash. Withholding takes care of taxes for teachers, laborers, waitpersons, store clerks, etc., all year long, while others find loopholes as easily as the GPS voice reveals the way to a destination.
Many of the loopholes would, on examination by an expert, turn out to be tax evasion. Given that the IRS was quick to notice the year our tax return went in unsigned, I believe some people must still be working there. But, they need more personnel, says everyone, including columnist Paul Krugman.
Krugman wrote last week that the Treasury Department thinks the gap between what’s owed and what’s paid could be as high as $500 billion every year. But, Republicans in Congress balked at the section in the infrastructure bill calling for boosting IRS resources, ignoring the fact that collection of the outstanding money would reduce the deficit, another of their pet peeves. It really is disgusting to think how diligently so many thousands pay while others either don’t bother or submit a questionable return. And the IRS doesn’t go after them.
As Krugman points out, not all of the tax cheats are billionaires. Decades ago, a medical professional asked me if I could pay cash instead of getting a bill later. A little puzzled, I did, not realizing until later that he would put that money in his pocket, tax free. I didn’t go back there. It was a moment that occurs every day, thousands of times a day, in the nonwithholding world.
Unpaid taxes affect us locally, too. At town meeting, we pay for things from what’s called “free cash.” It’s a sum of money certified annually by the state, and it’s free in the sense that these expenditures don’t affect property taxes for the next year.
It’s usually a healthy amount in this town, but it’s anemic in other places. That’s because if people don’t pay their property, boat and car taxes, every dollar unpaid is subtracted from free cash. Diligent and persistent tax collectors are valuable to every homeowner.
It’s hard to understand why anyone wants to protect tax cheats. And even harder why the game is played so hard by so many. And we pay for their children’s education, the roads they drive on, the clean water they drink, the first responders, the needs of the less fortunate, etc.
While I worry that the IRS will find a mistake — it’s the same kind of anxiety brought on by flashing blue lights in your rearview mirror — tax cheats gloat over their cleverness.